The Federal Government has attributed the continued crude oil supply shortfall facing the Dangote Petroleum Refinery to Nigeria’s previous practice of selling portions of its oil production in advance. Sunday Dare, Special Adviser to President Bola Tinubu on Media and Public Communications, said prior commitments had reduced the volume of crude available for domestic refineries, limiting supplies to the facility despite improved national production.
Key Highlights
- FG says advance sales of crude oil have contributed to supply shortages at the Dangote Refinery.
- Presidential aide Sunday Dare says previously committed oil volumes limit crude available to domestic refiners.
- The refinery has reportedly received fewer cargoes under the naira-for-crude arrangement than required.
- Dangote Refinery has sourced additional crude from international suppliers to sustain operations.
- Finance Minister Taiwo Oyedele says Nigeria lacks sufficient uncommitted crude to meet all domestic refining needs.
- The government says rising oil production and the release of additional committed volumes could improve supplies.
FG Explains Why Dangote Refinery Lacks Enough Crude Oil
Speaking on Trust TV’s 30 Minutes programme, Dare explained that some of Nigeria’s crude oil production had already been committed to buyers before it became available for allocation to domestic refineries.
“Why is it not getting enough? It is because part of our oil production has been sold ahead of time,” Dare said.
He acknowledged that he did not have the exact figures for the volume sold in advance but maintained that existing commitments continued to constrain crude supplies available to local refiners.
Dare also stressed the importance of adequate feedstock to the refinery’s operations, stating: “Without the crude oil it needs, that refinery cannot operate.”
The presidential aide defended the Tinubu administration’s efforts to support domestic refining, including the naira-for-crude arrangement introduced in 2024. The initiative allows participating domestic refineries to purchase crude oil and sell refined petroleum products in naira.
The policy was designed to ease foreign-exchange pressure, support local refining and reduce dependence on imported petroleum products.
However, reported shortfalls in crude deliveries have forced the Dangote Refinery to seek additional supplies from the international market.
Dangote Refinery Reports Crude Supply Shortfalls
The Dangote Petroleum Refinery has an installed processing capacity of approximately 650,000 barrels per day, making it one of the major refining facilities in Africa.
According to reports, the refinery was receiving fewer crude cargoes under the naira-for-crude arrangement than it required to operate at its desired level.
In March 2026, the refinery’s Chief Executive Officer, David Bird, reportedly said the facility was receiving about five cargoes monthly under the arrangement, compared with an estimated requirement of 13 to 15 cargoes.
By July, the refinery reportedly received approximately four million barrels monthly through the programme, below the roughly 13 million barrels envisaged.
NNPC Limited has maintained that it allocated available crude cargoes under the arrangement, while actual deliveries were affected by crude availability, nomination schedules and operational considerations.
The difference between expected and actual deliveries has remained a major issue in discussions about the supply of crude oil to domestic refiners.
Dangote Refinery Turns to International Crude Suppliers
The reported supply gap has also affected the refinery’s foreign-exchange requirements.
In July, the refinery began pricing some locally sold petroleum products in dollars, citing difficulties securing sufficient crude through the naira-for-crude programme.
To sustain operations, the facility has continued sourcing crude from international suppliers, including producers in Libya, Angola and Equatorial Guinea.
The reliance on imported crude highlights the challenges facing Nigeria’s efforts to connect domestic crude production more effectively with local refining capacity.
Although the Dangote Refinery is located in Nigeria, limited access to suitable crude volumes under domestic supply arrangements can increase its dependence on international purchases and foreign-exchange transactions.
Finance Minister Explains Nigeria’s Crude Oil Constraints
Dare’s comments are consistent with earlier remarks by Finance Minister Taiwo Oyedele, who reportedly said on Channels Television on October 9 that Nigeria did not have enough freely available crude oil to meet all the Dangote Refinery’s requirements.
According to Oyedele, national crude production had risen to approximately 1.7 million to 1.8 million barrels per day, compared with around 800,000 to 900,000 barrels per day when the Tinubu administration assumed office.
However, total national production does not represent the volume the government can freely allocate to domestic refineries.
Production-sharing contracts, joint ventures, operating costs, royalties and previous commitments all affect the quantity of crude available for allocation.
Oyedele said Nigeria did not currently have up to 700,000 barrels per day of uncommitted crude available for free allocation, including to the Dangote Refinery.
He expressed hope that higher production and the eventual release of additional volumes from existing commitments would improve crude availability for domestic refiners.
Read also:
- Nigeria Lacks Enough Crude Oil to Fully Supply Dangote Refinery, Says Oyedele
- Why Dangote Switched Sales Of Petrol To Dollars
- Dangote Foundation To Offer Free Refinery Shares To 778,000 Women in 15 States
Pipeline Security and Domestic Refining Policy
Dare also pointed to improved pipeline security as one of the factors supporting increased crude oil production.
The government has defended its broader support for the Dangote Refinery and the implementation of policies intended to strengthen local refining. However, the continued supply gap illustrates the challenges of ensuring that rising national production translates into sufficient crude deliveries to domestic processing facilities.
For Nigeria to maximise the benefits of local refining, crude production, existing contractual obligations, supply schedules and domestic allocation policies must work together more effectively.
The extent to which additional crude volumes become available will be important in determining whether domestic refineries can reduce their reliance on international purchases and help lower the country’s dependence on imported petroleum products.
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