LAGOS, Nigeria – The $20 billion Dangote Petroleum Refinery, Africa’s largest oil processing facility, is preparing to cease crude oil imports by December 2025, shifting entirely to locally sourced crude. This landmark move, announced by the refinery’s Vice President, Devakumar Edwin, is expected to reduce Nigeria’s reliance on imported refined products, streamline operations, and support domestic oil producers. However, the refinery’s ambitions face mounting challenges, including inconsistent local crude supply, regulatory friction, and accusations of monopolistic practices.
The 650,000-barrel-per-day (bpd) refinery, developed by Africa’s wealthiest businessman, Aliko Dangote, is currently refining 550,000 bpd, with a goal to reach full capacity by the end of the year. As of June 2025, 53% of the refinery’s feedstock was sourced from Nigerian oil fields, with the remainder imported from the U.S., Brazil, Angola, and Ghana. Edwin confirmed that contracts with foreign suppliers are winding down and will not be renewed, citing upcoming deliveries of five million barrels from the Nigerian National Petroleum Company Limited (NNPC) scheduled for July and August. “Improved collaboration with local traders and authorities will ensure a stable supply of Nigerian crude,” Edwin told Bloomberg, emphasizing the refinery’s push toward self-reliance.
The shift to local crude could redefine Nigeria’s energy profile, transforming the country from Africa’s largest petrol importer into a regional fuel exporter. Already, the refinery has contributed to a dramatic 54% reduction in Nigeria’s petrol import bill in Q1 2025—down to ₦1.76 trillion from ₦3.81 trillion in the same period last year. From August 15, 2025, Dangote Refinery will begin direct distribution of petrol, diesel, and jet fuel to retail stations and industries, a move expected to save the country ₦1.7 trillion annually in logistics costs.
Yet, securing sufficient domestic crude remains a formidable challenge. Nigeria’s oil production has been hampered by years of underinvestment, rampant theft, and operational inefficiencies, falling short of meeting Dangote’s demand. In July alone, the refinery imported five million barrels of U.S. West Texas Intermediate (WTI) crude to cover the supply gap. Public commentary on social media has underscored this issue, noting that the country's current output—approximately 250,000 bpd—lags far behind the 400,000 to 500,000 bpd required to sustain current operations, let alone full capacity.
Complicating matters further, some upstream producers previously resisted government mandates to allocate crude to local refiners, preferring to sell to international buyers in exchange for foreign currency. In response, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) banned certain exports and introduced a production curtailment mechanism to channel crude to local refiners. Despite these efforts, smaller refineries continue to struggle, sparking accusations that Dangote enjoys preferential treatment. The Crude Oil Refineries Association of Nigeria (CORAN) has criticized the government for failing to secure crude for modular refineries, claiming that the current environment gives Dangote an unfair advantage.
The refinery’s aggressive pricing strategy has also stirred controversy. Earlier in 2025, NNPC briefly halted crude supply to Dangote amid a pricing dispute. The refinery’s decision to cut petrol prices from ₦880 to ₦820 per litre placed significant pressure on independent marketers, who accused Dangote of undercutting competition and fostering a monopoly. The Petroleum Products Retail Outlets Association of Nigeria has warned that direct distribution by Dangote could destabilize the market, threaten jobs, and ultimately hurt consumers. Reports suggest that over 95% of petroleum importers currently avoid Dangote products, citing pricing and supply concerns, with the refinery reportedly struggling to offload as many as 29 tankers of diesel per day.
Regulatory tensions have further complicated operations. Oil producers boycotted curtailment meetings organized by the NUPRC, temporarily suspending refiners’ access to local crude allocations. Meanwhile, Dangote’s earlier dependence on dollar-denominated crude imports, while selling refined products in naira, created currency mismatches that led to a temporary suspension of naira-based fuel sales in March 2025. Although the government’s “Naira-for-Crude” policy has since alleviated this pressure, foreign exchange volatility and logistical bottlenecks remain persistent obstacles.
Nevertheless, Dangote’s growing influence in the energy sector is indisputable. Its price cuts, such as the recent reduction to ₦820 per litre, have effectively set the market standard, compelling other players to follow. The refinery’s expansion strategy—including the development of 1.6 million-barrel fuel storage facilities in Namibia—underscores its continental ambitions. Backed by strengthened alliances with the NNPC, support from local traders, and policy frameworks like the Petroleum Industry Act, the company is positioning itself to become the dominant force in African fuel supply.
As Nigeria stands at a crossroads, the success or failure of Dangote’s transition to 100% local crude will shape the nation’s path toward energy independence. Whether this bold strategy results in a self-sustaining fuel economy or falters under the weight of structural challenges remains to be seen.