Nigeria moves to aid Dangote

from OKORO CHINEDU
LAGOS, (CAJ News) – NIGERIA is considering reforms to crude allocation and pricing rules to improve feedstock access for domestic refineries such as Dangote Refinery.

The move comes as Abuja seeks to expand local refining, reduce fuel imports and capture more value from its oil resources.

Proposals under review would allow producers linked to international oil companies to supply nearby Nigerian refineries directly, cutting intermediaries.

Refiners lifting crude at production sites could receive discounts reflecting savings on transport and handling costs.

Crude Oil Refinery-owners Association of Nigeria (CORAN) says middlemen add US$3-$4 per barrel to refining costs. NUPRC says compliance has improved from below 43% to over 90%.

The Dangote refinery was formally inaugurated by President Muhammadu Buhari on 22 May 2023, although commercial operations began in January 2024.

Located in Lekki, Lagos, it has capacity to refine 650,000 barrels per day, making it Africa’s largest and the world’s largest single-train refinery.

Nigeria sells most of its crude abroad. In 2024, Europe received about 622,000 barrels per day of Nigerian crude oil and condensate exports, the largest regional share. Asia-Pacific took about 276,000 b/d, with India receiving 123,000 b/d.

This means Europe remains the principal destination, while Asian markets are also significant.

Africa’s five leading oil producers in 2025, based on crude output, were Nigeria at 1.61 million barrels per day, Libya at 1.36 million, Algeria at 1.14 million, Angola at 1.03 million, and Egypt at 0.51 million barrels per day. These figures are annual averages, so monthly output can vary significantly.

The proposed reforms therefore matter beyond Dangote. Better access to competitively priced domestic crude could improve refinery utilisation, reduce logistics costs and keep more value inside Nigeria.

But success will depend on resolving disputes over crude quality, pricing and commercial terms, while higher national production remains essential.

If implemented effectively, Nigeria could move closer to an integrated oil economy.

– CAJ News