Dangote Refinery Receives Just a Third of Its Monthly Crude Oil Shipments, Says Chief Executive

The Dangote Refinery, led by Chief Executive Officer David Bird, is facing a significant shortfall in its crude oil supply under the Federal Government's crude-for-naira arrangement, with the facility receiving only about five cargoes of crude monthly. This falls far short of the expected 13 to 15 cargoes, as disclosed by Bird during an interview on ARISE News on Wednesday.

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Bird emphasized that the refinery's ability to fully utilize local crude supply has been hindered by the supply gap, despite existing agreements, and noted that the facility should be getting around 13 to 15 cargoes per month to meet Nigeria's domestic fuel requirements.

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The current shortfall has forced the refinery to seek preferred Nigerian crude grades from the international market at higher costs, resulting in a loss of value for Nigeria as it leaks money to the international trading community, according to Bird.

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The crude-for-naira policy, Bird explained, was designed to stabilize Nigeria's foreign exchange market rather than provide financial benefits to the refinery, which still purchases crude at international benchmark prices.

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Bird clarified that the crude-for-naira program is not intended to benefit Dangote Refinery, but rather to provide foreign exchange resilience, allowing the country to process domestic crude in the domestic currency.

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Despite the supply challenges, the refinery is operating at its full installed capacity of 650,000 barrels per day, supplying both domestic and regional markets, according to Bird.

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However, Bird noted that global oil market disruptions, particularly tensions in the Middle East, have increased operational costs across the refinery's value chain, including freight, insurance, and logistics.

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Fuel pricing remains tied to international market forces, with the refinery operating without subsidies or discounts on crude inputs, as stressed by Bird.

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Bird called for improved crude allocation and long-term strategic planning, including building national reserves, to strengthen supply chain resilience in Nigeria's oil sector.