The Nigerian National Petroleum Company Limited (NNPCL) has announced an increase in crude oil allocations to the Dangote Refinery, assigning seven cargoes for May in a move aimed at boosting domestic fuel production amid rising global and domestic petrol prices.
According to industry sources and refinery officials, the decision follows ongoing negotiations to secure additional volumes beyond the refinery’s current supply.
A senior Dangote official confirmed that while the increased allocation would not fully meet the refinery’s monthly requirements, it would provide some relief.
For April, the refinery continued to receive five cargoes, short of the 13 to 15 cargoes it ideally requires under the crude-for-naira programme, according to Dangote CEO David Bird.
Crude supplied by NNPCL is more cost-effective for the refinery due to lower shipping costs, in contrast to the premiums paid for international cargoes, which recently reached as high as $18 per barrel above the Brent crude benchmark.
However, analysts note that higher domestic allocations may reduce Nigerian crude available for export, at a time when the Middle East conflict has restricted global supply.
Fuel prices in Nigeria have surged to record levels, and the Dangote Refinery has historically struggled to source sufficient local cargoes, relying on costly imports to meet production targets.
Despite raising gasoline output to cover more than two-thirds of Nigeria’s daily 60 million litre demand this month, the refinery still depends on imported crude to reach full capacity. Ongoing conflicts involving Iran, the US, and Israel have complicated importation, exposing the refinery to price volatility that directly affects motorists.
Ireporter Online