The Nigerian National Petroleum Company Limited (NNPC) and Dangote Refinery are making strides in their ongoing negotiations over in-country fuel supply. According to Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries, the NNPC has requested to permanently station a team at the refinery to oversee crude supply and monitor production.
As part of the deal, Aliko Dangote has agreed to sell refined petrol to the Nigerian government in Naira, despite the financial risks associated with exchange rate fluctuations. Discussions regarding crude pricing and the exchange rate are ongoing, but this arrangement marks a significant shift in Nigeria’s fuel supply chain.
However, local fuel marketers are largely avoiding purchasing products from the 650,000 barrels per day refinery, forcing Dangote Refinery to export up to 97% of its output. This includes diesel and jet fuel, even though the refinery was designed to meet domestic demand.
The refinery can meet all of Nigeria’s fuel needs with just 44% of its production, highlighting the potential to save foreign exchange and generate additional revenue through exports. Despite the challenges, Dangote Refinery remains committed to its goal of utilizing local crude to reduce dependence on fuel imports.