Rising Fuel Prices: NNPC May Provide Foreign Crude to Dangote Refinery

The Federal Government, through the Nigerian National Petroleum Company Limited, has begun efforts to secure crude oil for the Dangote Petroleum Refinery by sourcing supplies from third-party international traders to support domestic refining operations.

However, officials noted that the move may not immediately lead to a drop in petrol prices. Nigerians are currently dealing with high fuel costs following recent price increases introduced by the $20bn Lekki-based refinery.

Industry operators confirmed that the refinery recently suspended the loading of Premium Motor Spirit, a development that has sparked speculation about a possible fresh increase in fuel prices.

If implemented, it would represent the third adjustment in petrol prices within a week. Gantry prices have already risen from N774 to N995 per litre, pushing pump prices above N1,000 per litre in many states. In some areas, petrol is now sold for around N1,200 per litre, adding to the financial strain on consumers.

Market data also highlights changing crude sourcing patterns. Analytics firm Kpler reported that Nigeria’s crude imports from the United States climbed to 41.13 million barrels in 2025, representing a 161 per cent increase from 15.79 million barrels in 2024.

Amid the rising fuel costs, motorists and businesses are preparing for potential increases in transport fares and the prices of goods. The refinery’s temporary halt in petrol loading the second in a week underscores the logistical challenges of maintaining domestic supply, especially amid volatility in global crude markets.

Analysts say stable petrol prices depend largely on consistent crude supply to local refineries. One major factor affecting supply is the ongoing geopolitical tension in the Middle East, particularly the Iran–United States tensions, which has disrupted oil supply chains and pushed Brent crude prices above $92 per barrel.

The situation has been worsened by tensions around the Strait of Hormuz, a crucial energy corridor through which a large share of global oil shipments passes.

Industry sources said NNPC is now leveraging its international crude trading network to obtain third-party supplies for the Dangote refinery at competitive global market rates in order to sustain operations.

Despite this, refinery sources indicated that sourcing crude from international markets may not immediately lower petrol prices, as the Middle East crisis is affecting global energy prices, including crude oil and liquefied natural gas.

The refinery also pointed to limitations in domestic crude supply. It reportedly receives about five cargoes of crude each month from NNPC under the naira-for-crude arrangement, which is significantly lower than the 13 cargoes required to meet its production targets. As a result, it relies partly on imported crude purchased at international prices.

Industry stakeholders believe that increased domestic refining capacity could help moderate petrol prices over time. However, they warn that global market conditions, import costs and supply limitations remain key factors influencing pricing.

Experts also highlighted the impact of restricted import licences on market competition. According to industry observers, most marketers who applied for petrol import permits this year were not granted approval, a move aimed at encouraging local refining.
Analysts say a balanced approach that allows limited imports while boosting local refining could strengthen energy security and stabilise prices.

Despite the challenges, observers note that the presence of the Dangote refinery has helped prevent even sharper price increases. Without it, some analysts believe petrol prices in Nigeria could have climbed as high as N1,500 per litre amid current global energy market pressures.

Recent data further shows Nigeria’s growing reliance on foreign crude for refining. In July 2025, the Dangote refinery reportedly imported about 590,000 barrels of crude per day, with around 60 per cent sourced from US light sweet crude and 40 per cent from Nigerian grades marking the first time imported crude exceeded domestic supply for the refinery.

Meanwhile, figures from the Nigerian Upstream Petroleum Regulatory Commission indicate that local refiners received 67.66 million barrels of crude between January and August 2025, far below the 123.48 million barrels requested.

Industry observers say this shortfall highlights the ongoing gap between refinery demand and available domestic crude supply.
Petrol currently sells for between N1,030 and N1,100 per litre in major cities, forcing transport operators to increase fares and raising concerns about broader inflationary pressures across the economy.

At the same time, the Dangote refinery has expanded its network of petroleum marketers and distribution partners to ensure steady product lifting nationwide. The list has grown from 13 companies to more than 30.

Among the approved distributors are NIPCO Plc, MRS Oil Nigeria Plc, TotalEnergies Marketing Nigeria Plc and Conoil Plc, among others, as the refinery works to maintain supply despite ongoing market challenges