The Dangote Petroleum Refinery is increasing its crude oil storage capacity with the construction of eight additional tanks, aiming to store an extra 6.29 million barrels (1 billion litres) of imported crude oil. This expansion will boost the refinery’s crude storage capacity by 41.67%, from 2.4 billion litres to 3.4 billion litres.
The $20 billion facility, which began producing diesel and aviation fuel in January 2024 and petrol in September, has been increasingly reliant on imported crude oil due to unreliable local supplies from the Nigerian National Petroleum Company Limited (NNPC).
“Importing crude from other countries instead of buying locally means that our crude stockpiles will have to be higher,” Devakumar Edwin, Vice President of Oil and Gas Business at Dangote Industries, stated. “So we have started building eight additional crude tanks to hold a billion litres, over and above our original storage capacity. Four of them are nearing completion.”
The refinery currently operates 20 crude storage tanks, each with a capacity of 120 million litres. It also boasts refined product tanks capable of storing 2.34 billion litres.
Despite Nigeria’s status as Africa’s largest oil producer, the country has faced significant production disruptions due to theft and pipeline vandalism. These challenges have resulted in fluctuating output and periodic losses of its top spot as Africa’s leading oil producer.
Although Nigeria’s crude oil production reached 1.45 million barrels per day (mbpd) in November 2024—99% of its 1.5mbpd OPEC quota—supply to the Dangote refinery has remained limited. Edwin described crude deliveries from the NNPC as “still very low,” compelling the refinery to rely more heavily on imports.
In response to months of crude shortages at the refinery, President Bola Ahmed Tinubu introduced a naira-for-crude initiative in August 2024. The program allowed the NNPC to sell crude oil to local refineries, including the Dangote facility, in exchange for payment in naira. The policy aimed to stabilize fuel supply and reduce petroleum product prices.
Aliko Dangote, President of the Dangote Group, praised the initiative in December 2024, noting its impact on lowering domestic fuel prices. However, the refinery’s decision to increase imported crude oil storage suggests a possible decline in the effectiveness of the naira-for-crude arrangement.
The expansion of storage facilities aligns with Dangote’s broader strategy to ramp up production and cater to both domestic and international markets. As petrol from the refinery gains popularity among Nigerian vehicle owners, the facility is positioning itself to remain a key player in the region’s energy sector despite ongoing supply challenges.
