DANGOTE Refinery is set to purchase at least 24 million barrels of United States’ (US) crude oil over the next one year amid Nigeria’s crude oil production shortfalls. 

Bloomberg revealed the plan in a report, stating that refinery issued a term tender to buy two million barrels per month of West Texas Intermediate Midland crude for a year starting in July.

This amounts to 24 million barrels of US crude in one year that the $20 billion refinery established by Africa’s richest man, Aliko Dangote, will purchase over the period.

The tender will close at 3 p.m. on May 21, indicating how Nigeria’s crudes are struggling to compete against American supply, it stated.

The 650,000 barrels per day production, expected to reach full capacity by the end of this year, sources one-thirds of its feedstock from the US.

In December 2023, Dangote Refinery received its first one million barrels of Agbami crude grade from Shell International Trading and Shipping Company Limited (STASCO), after it failed to come on stream in August of that year as planned.

Besides crude oil production shortfalls, Nigeria’s known four refineries have been in comatose with the hope that Dangote Refinery will serve as a major step towards increasing the country’s local refining capacity.

Nigeria struggles to meet its Organization of Petroleum Exporting Countries (OPEC) quota and domestic supply demands, despite being one of Africa’s leading crude oil producers.

The ICIR reports that the Nigeria Upstream Petroleum Regulatory Commission (NUPRC) directed crude oil production companies to supply to domestic refineries and export only after domestic demands have been met.

This move could benefit the Dangote refinery to procure crude oil from local suppliers rather than depend on imports.

In April, the refinery began diesel and aviation jet fuel sales to domestic marketers, slashing the litre price to as low as N1,000 from about N1,300 the product was previously sold.

The ICIR reported how production at the refinery could influence a 15 per cent price reduction of petrol, earn huge foreign exchange savings and meet the country’s local consumption demand.