The ambitious supply arrangement between Dangote Petroleum Refinery and the Nigerian National Petroleum Company Limited (NNPC Ltd.) is under pressure following a significant crude oil supply deficit estimated at 79.53 million barrels between October 2025 and mid-March 2026.
Findings indicate that the refinery, which requires about 19.77 million barrels of crude monthly to operate at full capacity, received far less than expected within the review period. Total supply stood at 29.21 million barrels, compared to an estimated requirement of 108.74 million barrels, representing just 26.9 percent of its needs.
A monthly breakdown shows persistent under-supply, with deliveries ranging between roughly one-fifth and one-third of required volumes. Even in November, the highest supply month, only 6.45 million barrels were delivered, about 32.6 percent of demand.
At an average crude price of $67.94 per barrel, based on Bonny Light crude oil benchmarks, the refinery received crude worth approximately $1.98 billion. However, the shortfall represents an estimated $5.40 billion in unmet crude value, highlighting the scale of the supply gap.
Sources within the refinery argue that the situation contradicts provisions of the Petroleum Industry Act, which prioritises domestic crude supply before export. Despite this, Nigeria reportedly continued exporting significant volumes of crude during the period.
The supply challenges have also tested the effectiveness of the naira-for-crude arrangement introduced in October 2024, designed to allow the refinery to purchase crude in naira, reduce pressure on foreign exchange, and support local refining.
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Officials at the refinery disclosed that it receives about five cargoes monthly from NNPC, far below the 13 cargoes required, forcing it to rely on imported crude at higher costs. This has contributed to recent increases in fuel prices, with petrol reportedly rising above ₦1,300 per litre amid global oil market volatility.
The refinery attributed the price hikes to rising global crude costs, compounded by limited local supply and additional premiums paid to international traders.
Responding, NNPC officials acknowledged supply constraints but insisted efforts are underway to stabilise crude delivery. Managing Director of NNPC Retail Limited, Hubb Stokman, said the company remains committed to ensuring energy security and continuity of supply.
He noted that NNPC is collaborating with regulators and leveraging global trading networks to source third-party crude for the refinery at competitive international rates.
Industry sources, however, revealed that part of the supply gap stems from previously front-sold crude volumes, which have limited immediate availability for domestic refining.
Data from the Central Bank of Nigeria (CBN) underscores the broader issue. Between January and October 2025, Nigeria exported about 306.7 million barrels, nearly 69 percent of total production, leaving significantly less crude for local refineries.
Stakeholders, including the Crude Oil Refiners Association of Nigeria, warn that inadequate feedstock remains the biggest constraint to domestic refining. Its spokesperson, Eche Idoko, said some modular refineries are operating far below capacity or have shut down due to a lack of crude supply.
Petroleum marketers have also urged the Federal Government to prioritise crude allocation to local refineries, noting that domestic refining, particularly from the Dangote facility, has helped prevent even steeper fuel price increases.
The development highlights ongoing structural challenges in Nigeria’s oil sector, as the country seeks to balance export revenues with the urgent need to strengthen local refining capacity and achieve long-term energy security.
