By theGBJournal
MON MAR 09 2026-theGBJournal| Rising crude oil prices and persistent supply constraints from Nigerian upstream producers are mounting fresh pressure on the Dangote Refinery, threatening to complicate operations at Africa’s largest refining facility.
The refinery, designed to process up to 650,000 barrels per day, has increasingly faced challenges securing adequate volumes of crude domestically amid intense competition from export markets, as required under the PIA, forcing it to source a substantial portion through international traders who charge an additional premium.
To add to the pressure, Nigerian crude oil is more expensive than the Brent benchmark price by $3 to $6 per barrel.
Furthermore, Dangote Refinery receives about five cargoes a month from NNPC which they pay for in Naira, and these cargoes are priced at international market prices + Premium and fall short of the 13 cargoes which they require to support sales into Nigeria.
What that means is that Dangote Refinery is forced to end up procuring foreign exchange at open market rates to pay for crude cargoes purchased from local and international traders.
Industry sources indicate that elevated global crude prices have significantly increased feedstock costs, narrowing refining margins and forcing the refinery to seek alternative supply arrangements.
While Nigeria remains Africa’s top oil producer, inconsistent production levels and existing supply commitments have limited the availability of crude for local refiners.
The supply squeeze highlights broader structural challenges within Nigeria’s oil sector, where upstream output struggles to meet both export obligations and growing domestic refining demand.
Analysts warn that unless crude supply to local refiners improves, the refinery’s ambition to stabilise domestic fuel supply and reduce Nigeria’s dependence on imports could face renewed headwinds.
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