The Dangote Oil Refinery is preparing to ramp up its crude oil processing capacity to 400,000 barrels per day (bpd) over the next two months, marking a significant shift towards domestic supply utilization. According to a cargo allocation list obtained by Bloomberg, the 650,000 metric tons capacity facility near Lagos will receive approximately 24 million barrels of crude in October and November. This increase signals a major move towards reducing Nigeria’s reliance on imported refined oil products.
Ronan Hodgson, a London-based analyst at FGE, told Bloomberg that Dangote’s growing demand could tighten the West African crude market, possibly pushing Nigeria’s crude exports below one million bpd. The refinery’s intake has the potential to substantially alter the supply dynamics in the region as it scales up.
While the Dangote refinery is still operating at 60-70 percent capacity, the chairman of Engineers India Limited, Vartika Shukla, indicated that it will reach full operational capacity in the coming months. This comes as the refinery’s intake for October and November is notably higher than the 255,000 barrels per day it averaged during the first half of the year.
The refinery had earlier imported significant volumes of U.S. West Texas Intermediate (WTI) Midland crude, but recent data shows a decrease in U.S. crude purchases. Traders suggest the facility is focusing more on domestic supplies, following a deal with Nigerian National Petroleum Corporation (NNPC) Limited. NNPC has agreed to supply crude to Dangote in exchange for exclusive rights to distribute the gasoline produced.
However, despite the promising increase in refinery activity, some shipments may experience delays. October’s schedule includes two cargoes initially postponed from September, but the overall volume is expected to drive Nigeria closer to its long-standing goal of reducing costly refined oil imports.
Hodgson emphasized that increased production from the Dangote refinery will lead to a rapid reduction in the need for gasoline and diesel imports across West Africa, potentially transforming Nigeria’s energy landscape.
