A major turnaround of events in the activities of Dangote refinery is expected to further benefit local market.
Apart from announcing a further reduction in the ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol, from N840 to N820 per litre, the refinery the largest in Africa, is on track to process only Nigerian crude oil by the end of 2025, reports Bloomberg.
This milestone would sharply reduce the country’s dependence on imported petroleum products. This shift, according to Dangote Industries Ltd., marks a pivotal step toward energy self-sufficiency for Nigeria, the continent’s top oil producer.
Meanwhile, the new pricing takes effect immediately, according to a statement released by the company on Tuesday marking the second price cut by the refinery in just nine days.
This also signals a strategic move to ease fuel costs and stabilize downstream market prices.
On July 1, Dangote Refinery reduced the ex-depot price of petrol from N880 to N840 per litre, following a brief hike that had pushed the price to N880 in late June.
The latest reduction brings the total price drop to N60 per litre within a two-week window.
The ex-depot price is the rate at which petrol is sold to marketers at the refinery gate, and it directly influences the pump price consumers pay at filling stations.
“The new ex-depot price of N820 per litre takes effect immediately,” the company stated.
Major downstream operators such as MRS Oil & Gas, Ardova Plc, Heyden Petroleum, and others with direct supply agreements with Dangote Refinery are expected to adjust their pump prices accordingly.
Industry analysts anticipate that retail prices could fall below N885 per litre in response to the latest reduction.
The move is expected to provide some relief to consumers amid persistent inflationary pressures and high transportation costs.
The $19 billion facility, with a capacity of 650,000 barrels per day (bpd), has already begun to reshape Nigeria’s fuel landscape, transitioning the country from a net importer to a net exporter of refined petroleum products. As of June, the refinery sourced 53 per cent of its crude from local suppliers and 47% from international markets, including the U.S., according to Bloomberg data.
Devakumar Edwin, vice president at Dangote Industries and overseer of the refinery project, confirmed that the company anticipates securing 100 per cent of its crude needs from Nigerian producers before the end of the year. “We expect some of the long-term contracts will expire,” Edwin said in an interview, adding, “Personally, and as a company, we expect that before the end of the year, we can transition 100 per cent to local crude.”
The move aligns with Aliko Dangote’s long-stated goal of eliminating the inefficiencies and corruption tied to exporting Nigerian crude to Europe only to import refined fuel at a premium. The refinery, situated just outside Lagos, is currently processing 550,000 bpd and gradually increasing its output as more domestic crude becomes available.
However, achieving this target depends on ramping up local crude availability significantly over the coming months.
Nigeria’s oil sector has struggled with production due to theft, pipeline attacks in the Niger Delta, and the exit of international oil companies from onshore and shallow water fields, assets now operated by less-resourced local firms.
Dangote has had to turn to global suppliers such as Brazil, Angola, Ghana, Equatorial Guinea, and the U.S. to meet its early supply needs. But improved collaboration with Nigeria’s local traders, upstream producers, and government regulators is expected to stabilize domestic crude flows.
In July and August, the refinery is scheduled to receive five cargoes each month from the Nigerian National Petroleum Company Limited(NNPCL), with each shipment holding close to one million barrels. These allocations are key to meeting the refinery’s operational requirements and transitioning away from foreign oil dependence.
The refinery’s success is not just a win for Dangote, it also marks a strategic inflection point in Nigeria’s long battle to localize its oil refining industry, reduce foreign exchange outflows, and reclaim value lost to decades of fuel importation.
With Africa’s oil and gas industry under pressure from global energy transitions and local inefficiencies, Dangote Refinery’s domestic sourcing strategy could emerge as a model for sustainable energy independence across the continent. If the refinery succeeds in reaching full reliance on Nigerian crude, it will represent a rare triumph of industrial ambition and national policy alignment.
Discussion about this post