The planned partnership between the Dangote Petroleum Refinery and the Nigerian National Petroleum Company Limited is encountering difficulties after the refinery recorded a crude oil supply shortfall of about 79.53 million barrels between October 2025 and mid-March 2026.
Information from a senior refinery management source shows that the facility, which needs roughly 19.77 million barrels of crude each month to run at full capacity, received far less crude during the period under review.
Officials explained that the Petroleum Industry Act prohibits crude exports before domestic demand is satisfied. They noted that the $20 billion refinery in Lekki has struggled with insufficient crude supply while the country continued exporting oil through NNPC.
Records indicate that the refinery should receive about 19.77 million barrels monthly. Instead, deliveries stood at 4.55 million barrels in October, 6.45 million barrels in November, 4.30 million barrels in December, 5.65 million barrels in January, and 4.66 million barrels in February. Between March 1 and 15, only 3.6 million barrels were supplied.
Total crude supplied over the five-and-a-half-month period reached 29.21 million barrels, compared with an estimated requirement of 108.74 million barrels. Supply performance therefore stood at about 26.9 percent, meaning more than three-quarters of the refinery’s crude needs remained unmet.
Supply never exceeded one-third of required volumes, leaving a deficit of about 79.53 million barrels. Based on average Bonny Light crude prices provided by monetary authorities, the financial implications of the shortfall are substantial. Prices averaged $66.15 per barrel in October 2025, $65.22 in November, $68.05 in January 2026, and $72.33 in February, giving an average price of about $67.94 per barrel.
At that average price, the 29.21 million barrels delivered were worth approximately $1.98 billion. The 79.53 million barrels not supplied represented about $5.40 billion in crude value that the refinery could not access. Overall crude requirements for the period would have totaled roughly $7.39 billion at market prices.
Monthly deliveries consistently trailed demand. Even November, the strongest supply month, delivered only 6.45 million barrels, equal to about 32.6 percent of monthly requirements.
October deliveries met roughly 23 percent of demand, December accounted for about 21.7 percent, January reached around 28.6 percent, and February covered about 23.6 percent of required volumes.
The 3.6 million barrels supplied between March 1 and 15 also fell below expected levels when compared with half-month requirements. Overall, monthly supply ranged between one-fifth and one-third of operational needs, showing a persistent feedstock gap.
The situation highlights ongoing challenges in supplying crude to domestic refineries as Nigeria works to expand local refining capacity and reduce dependence on imported petroleum products.
In October 2024, authorities introduced a naira-for-crude arrangement between the Dangote refinery and NNPC. The policy allows the refinery to purchase crude oil in naira rather than dollars to ease pressure on foreign exchange reserves, support the local currency, and encourage domestic refining through stable crude supply.
Under the arrangement, NNPC supplies crude to the refinery, while the refinery sells refined petroleum products in naira within the domestic market. The structure aims to retain economic value locally and potentially reduce fuel prices. Although initially planned for six months, the agreement has continued through renewed supply arrangements, even as supply shortages and pricing issues test its effectiveness.
The refinery had earlier raised concerns about insufficient local crude supply for its operations. As global oil supply disruptions linked to tensions involving Iran and the United States intensified, the refinery increased fuel prices several times, pushing petrol prices above N1,300 per litre.
The company explained that local producers declined to supply adequate feedstock, forcing it to depend more heavily on imported crude.
According to the refinery, it receives about five cargoes monthly from the national oil company instead of the 13 cargoes required for domestic sales operations. The refinery added that it pays international market prices for these cargoes despite transactions being conducted in naira.
The company stated that high crude costs worsened because upstream producers failed to meet supply obligations under the Petroleum Industry Act, compelling the refinery to source crude through international traders who charge additional premiums.
NNPC responded by stating that it has intensified efforts to maintain a steady crude supply to the refinery as part of broader measures to stabilize fuel availability nationwide.
During a recent industry discussion, an NNPC retail executive said the national oil company remains responsible for ensuring stability and continuity in petroleum product supply across the country.
The executive added that NNPC is working with regulators and industry stakeholders to guarantee an uninterrupted supply of crude and refined products.
He also expressed confidence that existing supply channels, including domestic production and imports when necessary, would help maintain stable product availability.
Amid rising global oil market volatility linked to Middle East tensions and increased reliance on domestic refining, NNPC began sourcing third-party crude for the refinery.
Officials confirmed that the company is using its global trading network to secure third-party crude for the 650,000-barrel-per-day Lekki refinery.
The company said it would sell the sourced crude at prices competitive with international market rates, rejecting calls for government-controlled pricing designed to shield local refiners from global price increases.
Another official reiterated NNPC’s commitment to supporting domestic refining, stating that existing agreements ensure continued crude supply to the refinery despite temporary constraints.
Sources within the company acknowledged that the shortfall partly resulted from previously front-sold crude volumes, which created supply distortions. They maintained that the company is exploring alternative sources to close the gap.
Efforts to strengthen crude supply to local refineries continue as Nigeria increasingly depends on domestic refining capacity to reduce fuel imports and improve energy security.
Despite strong production levels, Nigeria exported an estimated 306 million barrels of crude between January and October 2025, leaving domestic refiners struggling to secure adequate feedstock.
During the same period, total crude production reached about 443.5 million barrels, averaging roughly 1.45 million barrels per day.
Exports accounted for nearly 69 percent of production, leaving about 137 million barrels available for domestic use.
Industry representatives criticized the persistent inability of local refineries to access crude supply, noting that some modular refineries halted operations for months due to shortages.
They explained that local refineries possess higher production capacity but cannot operate fully because of limited feedstock availability. Some modular refineries operate at about 10 percent capacity, while others shut down entirely.
Fuel marketers have also urged the government to ensure sufficient crude supply to Dangote and other domestic refineries to strengthen local refining output.
Marketers added that petrol prices could have risen to around N2,000 per liter without the contribution of the Dangote refinery.
African Energy Council