The Nigerian National Petroleum Company Limited (NNPCL) has been supplying less than 10% of the crude oil needed by the Dangote Refinery, despite the federal government’s initial commitment to support local refining, according to energy economist Kelvin Emmanuel.
Speaking on Politics Today, Emmanuel exposed inconsistencies in the NNPCL’s crude supply obligations, contradicting official claims that significant crude volumes have been provided to Dangote’s facility under the naira-for-crude deal.
NNPCL’s Crude Supply Falls Short
The economist revealed that between January and September 2024, Dangote Refinery purchased 36 million barrels of crude oil in U.S. dollars. From October 2024 to March 2025, the refinery received 48 million barrels, but less than 40% of this was paid for in naira.
“The NNPCL claimed to have supplied 84 million barrels since Dangote Refinery began operations, but the truth is that a large chunk of this was purchased in dollars, often at a premium,” Emmanuel stated.
Despite an agreement for 385,000 barrels per day (bpd) to be allocated to the refinery under the domestic crude supply obligations, Dangote is reportedly receiving only 61,290 bpd for March 2025 just 10% of its daily requirement.
Dangote Forced to Import Crude
Due to inadequate domestic supply, Dangote Refinery has resorted to importing over 90% of its crude needs from countries like the U.S., Algeria, and Angola.
“This means Dangote is buying crude in dollars but selling refined products in naira, which contradicts the government’s claim that the naira-for-crude initiative was stabilising the exchange rate,” Emmanuel explained.
NNPCL’s Prior Commitments Affect Local Supply
The NNPCL has reportedly committed over 300 million barrels to crude swap agreements, including Project Gazelle, Project Leopard, Project Bison, and Project Yield, making it difficult to prioritise local refining needs.
Additionally, between October 2024 and March 2025, NNPCL imported 41.5% of Nigeria’s petrol needs, despite claims that local refining would reduce fuel importation. Data shows that out of 4.4 billion litres of imported petrol, 1.83 billion litres were brought in by NNPCL.
Implications for Nigeria’s Oil Sector
The failure to prioritise local refining could worsen Nigeria’s foreign exchange crisis, as more dollars are spent on crude imports. Emmanuel warned that without consistent supply to Dangote and other local refiners, Nigeria’s dependence on imported petroleum products will continue, further pressuring the naira-dollar exchange rate.
He also criticised the government’s turnaround maintenance projects for the Port Harcourt and Warri Refineries, stating that the $2.4 billion spent has yielded no tangible results.
“Instead of wasting money on these non-functional refineries, NNPCL should have increased its equity in Dangote Refinery, which has proven to be Nigeria’s most viable refining investment,” he suggested.
A Call for Policy Reforms
To resolve these issues, Emmanuel urged the government to:
- Ensure full implementation of the domestic crude supply obligations to keep local refineries operational.
- Reduce dependence on dollar-based crude purchases by enforcing naira payments.
- Withdraw import licences for petrol once local refining meets demand.
- Encourage new refinery investments to increase competition in the downstream sector.
With Dangote Refinery currently refining 40 million litres of petrol daily, experts believe Nigeria can become self-sufficient in fuel production. However, this will only be possible if NNPCL shifts its priorities from crude swaps and external contracts to supporting local refining.
What’s Next?
With fuel prices and foreign exchange rates fluctuating, the next few weeks will determine whether the government takes action or continues policies that undermine local refining. As Emmanuel concluded, “If Nigeria wants true energy security, the solution is simple, supply crude to local refiners first.”
