The Nigerian National Petroleum Company (NNPC) Limited has allocated seven cargoes to the Dangote Refinery and Petrochemicals for May 2026, up from five in previous months, to boost fuel production and ease rising costs.
The 650,000 barrels per day Dangote Refinery, which is responsible for over 60 per cent of domestic supply, has not been able to get its expected feedstock from the national oil company under the Crude-for-Naira initiative. It has received about 40 per cent of local feedstock in recent months, according to the chief executive of the oil refinery, Mr David Bird.
He said the refinery currently gets only about five cargoes of crude monthly, against an expected 13 to 15 cargoes, noting that this was below its agreed crude oil supply under the federal government’s Crude-for-Naira arrangement.
Business Post reports that the majority of Nigeria’s crude production is tied to Joint Venture (JV) contracts, which constrain the optimal supply of crude oil to the Dangote Refinery.
According to Reuters, an unnamed senior Dangote official said, “NNPC has allocated more cargoes to Dangote for May,” adding that, “While this will not completely meet our demands, it can help. We are also in negotiation with NNPC for more volumes.”
The increase in crude allocations to the 650,000 barrel per day refinery could also curb volumes of Nigerian crude available for export at a time when the Iran war has drastically cut supply from the Middle East.
Due to the shortfall in the crude-for-Naira policy, the company will still have to purchase crude at international benchmark prices. The company sources crude from Brazil, Equatorial Guinea, Angola, Algeria, and the US, among others.
The official said Dangote recently had to pay premiums as high as $18 a barrel over the Brent crude benchmark to secure cargoes from the international market.
Since NNPC cargoes are cheaper for the refinery because of lower shipping costs. This could translate to higher fuel prices with Nigerians buying as high as N1,300 – N1,400 at the pump.
Fuel prices in Nigeria have reached record highs as Dangote has had to increase petrol depot prices by about 13 per cent in the last month.
