Africa’s largest oil refinery, the Dangote Refinery, expects to rely entirely on Nigerian crude oil by the end of 2025 a move that could dramatically reduce the country’s dependence on imported crude and reshape regional energy dynamics.
According to a new report by Bloomberg, the 650,000-barrel-per-day facility — located in Lekki Free Zone, Lagos is steadily increasing its uptake of local crude, sourcing about 53% of its supply from Nigerian producers in June.
“We expect some of the long-term contracts will expire,” Devakumar Edwin, vice president at Dangote Industries Ltd., told Bloomberg last week during an interview at the sprawling refinery site. “Personally, and as a company, we expect that before the end of the year we can transition 100% to local crude.”
Transforming Nigeria’s Refining Landscape
For decades, Nigeria, Africa’s top oil producer, exported crude oil to Europe only to import refined petroleum products back at high cost a cycle riddled with inefficiencies and corruption. The Dangote Refinery was designed to break this pattern, allowing Nigeria to refine its own oil and meet domestic fuel needs more sustainably.
Commissioned in May 2023, the $19 billion facility has a capacity to process 650,000 barrels per day and is considered a flagship project for regional industrialisation. During a visit, President of the ECOWAS Commission, H.E. Dr. Omar Alieu Touray, described it as a “beacon of hope for Africa’s future” and a shining example of private-sector-led development.
Since its initial operations, however, the refinery has depended heavily on imported crude from countries like Brazil, Angola, Ghana, Equatorial Guinea, and even the United States, due to domestic supply constraints. In June, nearly half (47%) of its feedstock still came from the US.
Challenges to Local Supply
Nigeria’s oil sector has struggled with multiple obstacles. Oil majors have pulled out of onshore and shallow-water fields, leaving operations largely to local firms with fewer resources. Meanwhile, crude theft, pipeline vandalism, and security challenges in the Niger Delta have further strained local supply.
Yet, the Dangote Group remains optimistic. Improved collaboration between the refinery, local oil traders, and the Nigerian government is expected to unlock steady domestic supply and stabilize operations.
According to allocation data reviewed by Bloomberg, Dangote was scheduled to take five cargoes from the Nigerian National Petroleum Company Limited (NNPC) in July each cargo holding nearly one million barrels and is set to receive a similar number in August.
At present, the refinery is processing around 550,000 barrels per day, Edwin confirmed.
Economic and Strategic Implications
A full switch to Nigerian crude would not only help the country retain more value from its natural resources but also potentially position Nigeria as a net exporter of refined petroleum products a significant economic milestone.
Energy analysts believe this transition will reduce Nigeria’s spending on imported refined fuel, strengthen foreign reserves, and create jobs across the downstream value chain.
Moreover, the project underscores the critical role of local refining capacity in addressing chronic fuel shortages and price volatility that have long burdened Nigerian consumers.
Looking Forward
As the refinery ramps up, industry stakeholders and the government will need to address ongoing security and infrastructure challenges to ensure reliable local crude supply.
Ultimately, Dangote’s vision of a fully self-sufficient Nigerian refining sector could redefine the country’s energy independence and inspire similar large-scale industrial projects across Africa.
