Dangote Refinery To Source All Crude Locally By December

The Dangote Refinery, Africa’s largest with a capacity of 650,000 barrels per day, is set to transition to using only Nigerian crude by the end of 2025—a major shift expected to transform the country’s oil and gas sector.

Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries Limited, revealed the development in an interview monitored by Bloomberg at the refinery site in the Lekki Free Trade Zone, Lagos.

According to Edwin, local crude already accounts for about 50 per cent of the refinery’s intake as of June, with domestic producers steadily ramping up their supply.

“We expect some of the long-term contracts with foreign suppliers to expire soon,” Edwin said. “Our plan—both personally and as a company—is to transition fully to Nigerian crude by year-end.”

The refinery, a flagship project of Aliko Dangote, Africa’s richest man, was designed to reduce Nigeria’s reliance on imported petroleum products by processing its own oil locally.

Dangote has long argued that domestic refining would conserve foreign exchange, curb revenue leakages, and shield the economy from global supply disruptions.

Since commencing operations earlier this year, the refinery has gradually increased production, marking a significant milestone: Nigeria becoming a net exporter of refined petroleum products for the first time in decades.

However, the journey has not been without setbacks. Initially, the refinery depended heavily on imported crude—particularly from the United States—to compensate for limited local supply.

The exit of several international oil companies (IOCs) from Nigeria’s onshore and shallow water assets has compounded supply challenges.

Their divestments to local firms, many of which lack adequate funding and infrastructure, have disrupted output.

Additionally, issues such as crude oil theft, pipeline vandalism, and persistent security threats in the Niger Delta continue to affect production levels.

Despite these obstacles, Edwin remains hopeful. “As more indigenous producers meet their export obligations and turn attention to the domestic market, we expect local crude availability to improve,” he said. “Our objective is to support the Nigerian market and foster transparency and stability in the oil sector.”

The refinery’s shift to local crude carries significant implications. Despite being Africa’s leading oil producer, Nigeria has long relied on imported fuel to meet domestic demand, a paradox that has strained foreign reserves and subjected the country to chronic fuel shortages and price volatility.

The Dangote Refinery, with its immense processing capacity, is intended to reverse that trend. Beyond meeting national fuel needs, the plant is also expected to export surplus products to neighbouring West African nations.

The push for local sourcing aligns with broader government efforts to attract investment into the oil and gas industry.

The Petroleum Industry Act (PIA), enacted in 2021, was aimed at fostering transparency and creating a more investor-friendly climate, although its implementation has faced setbacks and slow execution.

As the refinery moves toward full dependence on Nigerian crude, stakeholders are watching closely to see whether it can spark the long-awaited transformation of the nation’s downstream oil sector.

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Dangote Refinery To Source All Crude Locally By December is first published on The Whistler Newspaper