Dangote Refinery to Gulp N1.7tn Crude Monthly – Report

The Dangote Petroleum Refinery will require approximately N1.7 trillion worth of crude oil monthly following a new directive from President Bola Tinubu. The President has instructed the Nigerian National Petroleum Company Limited (NNPC) to sell crude oil to the Dangote refinery and other domestic refineries in naira. Bayo Onanuga, the Special Adviser to the President on Information and Publicity, announced the decision on X.com (formerly Twitter), stating that the Federal Executive Council had adopted this policy to stabilize the pump price of refined fuel and the dollar-naira exchange rate. According to industry reports, the $20 billion Dangote refinery, located in Lekki, Lagos, will consume about N1.7 trillion of crude oil per month under this directive. With an average crude oil price of $83 per barrel in 2024, the refinery's daily requirement of 500,000 barrels per day (bpd) translates to a daily expenditure of $41.5 million, equivalent to N56.55 billion using the average exchange rate of N1,362.6/$.

Alhaji Aliko Dangote, President of Dangote Industries, recently indicated that the refinery would achieve a capacity of 500,000bpd by August and 550,000bpd by December 2024. The refinery aims to refine 500,000bpd of crude oil from August to November 2024 and increase to 550,000bpd by December. Chief Ukadike Chinedu, National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, emphasized the importance of meeting the President’s directive. He acknowledged the challenges in ramping up crude oil production but urged NNPC and its partners to fulfill the demand.

Eche Idoko, Publicity Secretary of the Crude Oil Refiners Association of Nigeria, highlighted that selling crude in naira could strengthen the local currency against the dollar and reduce the cost of petrol. He expressed optimism that implementing the President’s order would lead to a significant reduction in fuel prices. During a recent tour of the refinery, Dangote revealed that the facility is fully operational, with expected annual revenue exceeding $26 billion. The refinery is scheduled to reach 500kbpd by next August, 550kbpd by the end of the year, and 650kbpd by the first quarter of 2025. The production of gasoline will begin in July, with sales starting in August. The refinery also includes extensive facilities for handling crude and petroleum products, a polypropylene plant, and production facilities for sulphur and carbon black.