By Udeme Akpan, Energy Editor
Despite the naira-for-crude arrangement designed to ensure adequate supply to domestic refineries, Dangote Petroleum Refinery has concluded plans to import 13.62 million barrels of crude oil in May 2026.
This represents about 139.5 per cent of its 19 million barrels requirement for the period.
Checks by Vanguard showed that the federal government is expected to supply only 6.15 million barrels, leaving the management of the 650,000 barrels-per-day refinery with no option but to import the shortfall.
At the prevailing price of $110 per barrel, the imported volume would cost approximately $1.498 billion, equivalent of about N2.07 trillion at an exchange rate of N1,380.79/$.
Industry experts warned that the growing reliance on imported crude could sustain high fuel prices, with Premium Motor Spirit, PMS, also known as petrol, likely to remain above N1,300 per litre in the domestic market.
Speaking to Vanguard, weekend, Dr. Billy Gillis-Harry, National President of Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), said: “Speculation and price hikes in refined petroleum products will become inevitable.
‘’Once prices become unstable and trend upward, transportation costs will rise, triggering inflation in food prices and other essential commodities.”
Similarly, Mazi Colman Obasi, National President of Oil and Gas Service Providers Association of Nigeria, OGSPAN, stated: “Dangote Refinery was not built to depend solely on Nigerian crude. This is not the first time it is importing crude. If it must import, then it will also need to export refined products to remain commercially viable.
“While exports may bring in foreign exchange and support macroeconomic stability, the reality is that this may not significantly improve the living conditions of the average Nigerian.”
Also speaking, Jeremiah Olatide, Chief Executive Officer of Petroleumprice.ng, described the situation as paradoxical.
He said: “Nigeria is a major crude oil producer, yet its largest refinery depends on imported crude. Key priorities should include ensuring consistent domestic supply, improving upstream production and security, refining pricing mechanisms under the naira-for-crude framework, and strengthening coordination between the refinery and NNPC Limited.”
Another industry expert, who preferred anonymity, highlighted broader risks, adding that imported crude was priced in dollars at international rates, increasing feedstock costs, reducing refining margins, and potentially pushing up ex-depot fuel prices.
“It also raises demand for foreign exchange, exposes the refinery to currency volatility, and increases cost unpredictability. While imports may ensure steady supply, they expose the country to global shipping risks, geopolitical disruptions, and higher logistics costs.
“This trend could weaken confidence in government supply interventions, worsen the trade balance in the short term, and put additional pressure on the naira and foreign reserves,’’ the expert said.
Vanguard gathered that the federal government has again pledged to increase crude supply to domestic refineries.
However, similar commitments in the past were not fully met, largely due to limited crude availability.
FG missed 770,500 bpd supply target in H1 2025
In the first half of 2025, the Nigerian Upstream Petroleum Regulatory Commission, NUPRC, disclosed plans to supply 770,500 barrels per day (bpd) to domestic refineries, representing about 37 per cent of projected production of 2.07 million bpd.
The target was tied to its Project 1 million Barrels initiative, which was aimed at boosting national output.
The commission also projected a short-term production target of 2.5 million bpd, driven by improved collaboration between upstream operators and domestic refiners.
Despite supply challenges, the Presidency maintained that the naira-for-crude initiative had strengthened Nigeria’s resilience amid global energy disruptions.
Temitope Ajayi, Senior Special Assistant to the President on Media and Publicity, said the initiative, launched on October 1, 2024, has enhanced supply security and stabilised the economy.
He noted that a technical committee, led by Wale Edun, Minister of Finance and Coordinating Minister of the Economy, alongside Zacch Adedeji, Chairman of the National Revenue Service, NRS, had helped sustain the framework.
According to him, the ongoing Iran-Israel-US conflict, including disruptions to the Strait of Hormuz, has triggered global supply shocks, leading to rising energy prices worldwide.
He said: “Many countries are experiencing shortages and extreme price increases. However, Nigeria has largely avoided these disruptions due to local refining capacity.
“Dangote Refinery has ensured product availability, eliminated fuel queues, and cushioned the impact of global volatility.
“Even with rising crude prices, the refinery recently reduced petrol prices by N75 per litre, despite paying premiums of up to $18 per barrel for crude. This demonstrates the value of local refining.”