The Federal Government, through the Nigerian National Petroleum Company Limited (NNPCL), has begun moves to secure crude oil supply for the Dangote Petroleum Refinery through third-party international traders in a bid to sustain domestic refining operations, according to a report by The Punch.
Officials, however, warned that the intervention may not immediately translate into lower petrol prices for consumers. Nigerians are currently grappling with high fuel prices following recent increases by the $20bn Lekki-based refinery.
Oil dealers and industry players confirmed that the refinery temporarily suspended the loading of Premium Motor Spirit (petrol), a development that heightened speculation that another fuel price increase could be imminent.
If implemented, this would mark the third surge in petrol prices within a week after adjustments pushed gantry prices from N774 to N995 per litre. As a result, retail pump prices in several states have exceeded N1,000 per litre, with some filling stations dispensing petrol at about N1,200 per litre, intensifying economic pressure on Nigerians.
Recent market data also shows a significant shift in crude sourcing patterns. Analytics firm Kpler reported that crude imports by Nigeria from the United States rose to 41.13 million barrels in 2025, representing a 161 per cent increase from 15.79 million barrels in 2024.
Amid the rising fuel prices, motorists and industry observers are bracing for the impact on transport fares and the cost of goods. The refinery’s temporary halt in petrol loading, the second within a week, reflects logistical challenges in sustaining domestic supply, particularly amid volatility in the global crude market. Analysts say stabilising prices depends largely on reliable crude allocation to domestic refineries.
One critical factor affecting global oil prices is the geopolitical crisis in the Middle East, particularly tensions involving Iran and the United States, which have disrupted oil supply chains and pushed Brent crude prices above $92 per barrel. Tensions around the Strait of Hormuz, a vital global energy transit corridor, have further compounded the price surge.
Multiple industry sources and officials from both the Nigerian National Petroleum Company Limited and the Dangote refinery confirmed that the national oil company is leveraging its global crude trading network to source third-party supply for the refinery at competitive international market rates.
A senior NNPC official, who spoke on condition of anonymity because he was not authorised to comment publicly, said the company was working to secure crude for the refinery through international suppliers at competitive prices.
He added that as the national oil company entrusted with safeguarding Nigeria’s energy security, NNPC Limited remains committed to supporting domestic refining, including the Dangote Petroleum Refinery, and will continue to facilitate crude supply within the framework of existing agreements despite temporary availability constraints.
The refinery, however, cautioned that sourcing crude internationally may not immediately reduce pump prices. A refinery source explained that the ongoing crisis in the Middle East is affecting global energy prices, including crude oil, liquefied natural gas and other fuels, which has implications for refined product pricing worldwide.
The refinery also highlighted constraints in domestic crude supply. It reportedly receives about five cargoes a month from NNPC under the naira-for-crude arrangement, instead of the 13 cargoes required to meet its operational needs, forcing it to rely on imported crude purchased at international market rates.
According to the refinery, the cargoes received from NNPC are priced at international market rates plus premium, and the volume falls significantly short of what is required to sustain local supply.
Industry stakeholders say increased domestic refining output could help moderate petrol prices. The National Publicity Secretary of the Crude Oil Refinery Owners Association of Nigeria, Eche Idoko, said the naira-for-crude policy could influence local pricing if fully implemented but warned that imported crude costs and global tensions remain major limiting factors.
Idoko explained that the Dangote refinery requires about 14 cargoes of crude from the government under the naira-for-crude policy to meet its operational demands. He noted that if this allocation is fully met, it could positively affect local fuel prices. However, he added that as long as the refinery sources most of its feedstock from the United States and must navigate routes affected by tensions around the Strait of Hormuz, the additional cost will likely be passed on to Nigerian consumers.
He also called for the expansion of the policy to other domestic refineries to promote competition and stabilise prices. Idoko further pointed out that operational costs linked to the refinery’s location in a free trade zone also affect pricing, as certain charges applicable to imports still apply to crude supplied to the refinery.
According to him, the additional cost of about $5 to $7 per barrel is significant and should ideally be removed to help reduce the final price paid by consumers.
Energy analysts have also highlighted the impact of limited import licences on competition within the fuel market. The Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, said nearly 90 per cent of marketers who applied for petrol import permits this year were not granted approval, largely to encourage the operations of local refineries, particularly the Dangote refinery.
Olatide noted that a balance between domestic refining and controlled imports would strengthen Nigeria’s energy security and stabilise fuel prices. He suggested that imports should account for about 20 to 25 per cent of total supply, while the rest should be refined locally.
Despite the supply pressures, analysts say the presence of the Dangote refinery has helped cushion Nigeria from even higher petrol prices. Olatide stated that the global energy market is currently facing multiple crises and that if the refinery was not operating, petrol prices in Nigeria could easily have risen to about N1,500 per litre.
Recent market data also shows that crude exports from the United States to Nigeria increased significantly in 2025, reflecting the country’s growing dependence on imported crude to meet refinery feedstock needs.
In July 2025 alone, the Dangote refinery reportedly imported about 590,000 barrels per day, with 60 per cent coming from US light sweet crude and 40 per cent from Nigerian grades, marking the first time US supply exceeded domestic crude in the refinery’s feedstock mix.
Analysts say while this supports the refinery’s complex processing requirements, it also highlights the paradox of Africa’s largest oil producer relying heavily on imported crude despite rising domestic production.
Domestic crude allocations remain insufficient. The Nigerian Upstream Petroleum Regulatory Commission confirmed that between January and August 2025, local refiners received 67.66 million barrels of crude, far below the 123.48 million barrels they requested.
The shortfall reflects ongoing challenges in bridging the gap between increasing oil production and the demand from domestic refineries.
Meanwhile, the Dangote refinery has continued to operate within the realities of a deregulated market environment, absorbing part of the cost escalation to cushion consumers while ensuring uninterrupted supply.
A refinery official said selling refined products below cost would undermine the refinery’s ability to procure crude, sustain production and guarantee consistent supply.
The combined pressures of geopolitical tensions, local supply gaps and regulatory dynamics have created a difficult environment for fuel pricing. With petrol currently selling between N1,030 and N1,100 per litre in major cities, commercial drivers have already adjusted transport fares while consumers brace for higher costs of goods and services.
Industry sources say three major developments are currently shaping Nigeria’s fuel market: the possibility of a third petrol price increase within a week, the Dangote refinery’s temporary suspension of petrol loading and the sharp rise in crude imports from the United States.
These factors highlight the complex relationship between domestic refining capacity, global supply disruptions and government policy in determining the price of fuel in Nigeria.
Meanwhile, it was also gathered that the Dangote refinery has approved a new list of petroleum marketers and distribution partners to ensure continued lifting of petrol. The list has reportedly expanded from 13 to more than 30 companies nationwide.
The approved marketers include NIPCO Plc, MRS Oil Nigeria Plc, TotalEnergies Marketing Nigeria Plc and Conoil Plc, among others, as the refinery seeks to broaden distribution access while navigating ongoing supply and pricing challenges.
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