The Nigerian National Petroleum Company Limited (NNPC) will increase crude oil allocations to the Dangote Refinery starting May, industry sources confirmed. The refinery, which previously received five cargoes per month, is set to get seven, aiming to address soaring fuel prices driven by geopolitical tensions in the Middle East.
Nigeria has witnessed record-high fuel prices, partially due to the Iran war disrupting global oil supply. Dangote Refinery, Africa’s largest with a 650,000 barrels-per-day capacity, has struggled to source enough crude locally. While it ideally needs 13–15 cargoes per month, local sourcing has only supplied about five, forcing the refinery to purchase expensive international cargoes.
Increasing NNPC allocations to Dangote could ease domestic fuel costs, though it may reduce the volume of crude available for Nigerian exports. Experts say the move comes at a critical time, as Middle East supply disruptions have pushed buyers worldwide to seek alternative sources. “NNPC has allocated more cargoes to Dangote for May,” a senior refinery official told Reuters. “While this won’t completely meet our demands, it will help, and discussions for additional volumes are ongoing.”
Cheaper NNPC crude provides cost advantages for Dangote, saving on high international shipping premiums. Recently, the refinery paid as much as $18 above the Brent crude benchmark to secure imported cargoes, translating to around $137 per barrel. The additional domestic supply is expected to relieve some of the financial pressure while helping stabilize Nigeria’s fuel market.
Dangote has already increased gasoline distribution to meet over two-thirds of Nigeria’s daily demand of 60 million litres. Nonetheless, petrol prices at depots have risen by approximately 13% to reflect the higher cost of imports. As NNPC ramps up allocations, the industry hopes for a more sustainable supply that could ease price pressures for consumers nationwide.
source: Leadership