Dangote Industries Limited says its 650,000 barrels-per-day refinery, the largest in Africa, will begin relying solely on Nigerian crude by the end of 2025, in a shift set to redefine Nigeria’s energy landscape.
Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries, disclosed the plans during an exclusive interview monitored by Bloomberg at the refinery site located in Lekki Free Trade Zone, just outside Lagos.
According to Edwin, domestic oil producers have already begun ramping up supply, accounting for roughly half of the refinery’s crude intake in June.
“We expect some of the long-term contracts with foreign suppliers will expire soon,” Edwin said. “Personally, and as a company, we expect that before the end of the year, we can transition 100% to local crude.”
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A Vision Realized
Aliko Dangote, Africa’s richest man and the brain behind the multibillion-dollar refinery, has long championed the idea of processing Nigerian oil domestically rather than exporting crude and importing refined products at inflated prices. The model, he argued, would save foreign exchange, plug revenue leakages, and provide a buffer against global supply shocks.
Since beginning operations earlier this year, the refinery has steadily increased its output, recently making Nigeria a net exporter of refined products for the first time in decades. But this progress has come with challenges. To bridge gaps left by inadequate local supply, the plant initially had to rely heavily on imported crude, especially from the United States and other overseas suppliers.
Challenges in Local Supply
One of the core obstacles has been Nigeria’s troubled upstream sector. In recent years, several international oil companies (IOCs) have exited the country’s onshore and shallow water operations, selling off assets to local firms that often lack the capital and infrastructure to sustain high output levels. This shift has left gaps in production, just as domestic demand from the Dangote refinery began to rise.
Moreover, Nigeria’s oil-rich Niger Delta has been plagued by crude theft, pipeline vandalism, and security challenges, further undermining production and deliveries. Edwin acknowledged these hurdles but remains optimistic that the industry will stabilise.
“As more local producers fulfil their export obligations and focus inward, we believe crude availability will improve,” he said. “Our goal is to support the local market and bring stability and transparency to the oil sector.”
A Game-Changer for Nigeria
The implications of the refinery’s pivot to local crude are profound. For decades, Nigeria, Africa’s top oil producer, has paradoxically relied on fuel imports to meet domestic needs. This inefficiency has drained the nation’s foreign reserves and exposed it to recurring fuel scarcity and price volatility.
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The Dangote refinery was conceived as a game-changing solution to this problem. With a nameplate capacity to process 650,000 barrels per day, the plant is not only expected to meet Nigeria’s fuel demand but also supply excess volumes to neighbouring West African countries.
Industry stakeholders say the transition to local crude will also provide a steady market for Nigeria’s struggling oil producers, incentivise investment in upstream infrastructure, and improve the country’s balance of payments.
“This refinery is a national asset,” said Bala Zakka, a Lagos-based oil and gas analyst. “It has the potential to change the narrative of Nigeria being an oil-producing country that imports all its fuel. If Dangote succeeds in using 100% local crude, it will send a strong message to investors and policymakers alike.”
Policy and Regulatory Signals
The Dangote refinery’s push for local sourcing comes at a time when the federal government is trying to attract more investment into the oil and gas sector through reforms. The Petroleum Industry Act (PIA), signed into law in 2021, was designed to create a more transparent and investor-friendly environment, though its implementation has faced criticism and delays.
Analysts say successful local crude supply to the refinery could serve as a litmus test for the effectiveness of these reforms.
“The fact that Nigerian crude is now feeding one of the world’s largest refineries is an early success story,” said Nnimmo Bassey, an energy policy expert. “But this must be matched with improvements in production security, regulatory clarity, and support for local producers.”
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