The Dangote Petroleum Refinery is set to phase out all crude imports by December 2025, replacing foreign supply with Nigerian oil, according to Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries.
The plan, which would see the 650,000 barrels-per-day (bpd) facility rely entirely on domestic crude, marks a significant shift in Nigeria’s energy landscape.
Edwin told Bloomberg that contracts with foreign suppliers—including Brazil, Angola, Ghana, Equatorial Guinea, and the United States—will expire by year-end. In their place, the refinery will transition to sourcing all its feedstock from within Nigeria.
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“We expect some of the long-term contracts will expire. Personally, and as a company, we expect that before the end of the year, we can transition 100 per cent to local crude,” he said.
The Dangote Refinery, currently operating at around 550,000 bpd, sourced 53% of its crude from Nigerian producers and 47% from the U.S. in June 2025. That month marked a turning point as domestic producers began supplying roughly half of the feedstock—a development Edwin attributes to improved relations between the refinery, local traders, and the government.
This shift comes amid ongoing efforts by Africa’s most populous country to reclaim greater value from its crude production. For decades, Nigeria has exported most of its crude, only to re-import it as refined fuel at significantly higher costs. Dangote’s $20 billion refinery, located in Lagos, was built specifically to end this cycle and make Nigeria self-sufficient in fuel production.
Government support appears solid. The Nigerian National Petroleum Company Limited (NNPCL) is already allocating five cargoes—each carrying close to one million barrels of crude—to the refinery in July and the same number again in August.
Aliko Dangote, founder of the refinery, had previously revealed that the facility was relying heavily on U.S. crude despite the government’s “naira-for-crude” supply framework aimed at bolstering domestic supply. That dependence, he said, was driven by initial reluctance from local traders and producers to meet the refinery’s needs, forcing it to turn abroad.
Domestic Oil Production: A Persistent Concern
However, the refinery’s bold shift to 100 percent Nigerian crude faces a critical obstacle: the country’s low and inconsistent crude oil output. Official data shows that Nigeria’s production still hovers around 1.5 million barrels per day—well below its estimated potential of 2.2–2.5 million bpd and a far cry from what is needed to feed a refinery of Dangote’s magnitude while meeting export and debt-servicing commitments.
Years of underinvestment, rampant oil theft, pipeline sabotage, and operational inefficiencies continue to undermine production targets. Although the government has repeatedly pledged to ramp up output, progress has been sluggish. Oil majors operating in the country have either downsized or exited onshore assets, citing insecurity and rising operational risks.
This constrained output presents a real risk to Dangote Refinery’s plan. Nigeria’s oil is already entangled in forward sales agreements, where future oil deliveries have been pledged in exchange for loans and other financial arrangements. These deals significantly reduce the volume of unencumbered crude available for local use, including refinery feedstock.
Industry experts caution that unless Nigeria can lift its oil output significantly in the coming months, Dangote’s plans could face bottlenecks.
From Net Importer to Exporter
Although it has had to contend with early hurdles, the refinery’s gradual ramp-up has already begun to reshape Nigeria’s fuel economy. By the second quarter of 2025, Nigeria emerged as a net exporter of petroleum products for the first time in decades—though that milestone has not come without logistical and structural challenges.
One of the biggest of those has been the inability of local producers to meet the refinery’s initial demand. In the months following the plant’s January commissioning, the Dangote team was forced to import large volumes of foreign crude to keep operations running. A significant portion came from U.S. shale producers, known for their predictable supply and favorable contract terms.
But Edwin now says those days are numbered, with a surge in local deliveries expected in the coming months as more Nigerian oil traders wrap up existing foreign supply obligations.
But the success of the plan also hinges on the stability of government policies and the reliability of local producers to meet the quality and volume standards the Dangote plant requires. Any significant disruption in Nigeria’s oil-producing regions—particularly the Niger Delta—could strain operations.
Moreover, previous refinery projects in Nigeria have stumbled due to similar challenges. What sets Dangote apart is the sheer scale of the investment, the private-sector efficiency driving it, and growing cooperation with state-owned entities like NNPCL.