Dangote Refinery eyes higher imports amid talks on Naira-for-Crude deal

The Dangote Refinery, Africa’s largest oil refinery, is reportedly considering increasing its crude oil imports as discussions continue over the Naira-for-Crude arrangement with the Nigerian government.

This development comes as the Nigerian government engages in discussions to finalise a Naira-for-Crude deal, aimed at strengthening the local currency and reducing dependency on foreign exchange for oil transactions.

The $19 billion Dangote Refinery, Africa’s largest oil refinery, has been a cornerstone of Nigeria’s efforts to achieve self-sufficiency in petroleum products.

Since its operations, the refinery has significantly reduced the nation’s reliance on imported fuel.

However, with the facility close to operating at full capacity, the refinery is now exploring options to import crude oil to meet its production targets.

Bloomberg data showed Dangote refinery has taken delivery of more than three million barrels of American crude since the start of the month.

Read also: NNPC suspends naira-for-crude deal for Dangote, others

The refinery has also made purchases closer home, importing a shipment of Angola’s Pazflor grade and a cargo of Algeria’s Saharan Blend from Glencore Plc in recent weeks.

According to analysts at Energy Aspects Ltd., crude deliveries to the Dangote refinery have averaged 450,000 barrels per day in the past two weeks, up from an estimated 380,000 barrels per day in January and February.

“Our satellite monitoring shows a recent draw in crude stocks at the refinery, indicating runs are likely on the rise,” said Randy Hurburun, a senior refinery analyst at the consultancy.

On Monday, the Nigerian National Petroleum Company Limited said it has initiated fresh negotiations with the Dangote Petroleum Refinery over the renewal of the naira-for-crude agreement, as talks are underway in anticipation of the expiration of the initial deal, which ends on March 31, 2025.

The NNPC disclosed this in response to claims that the government-owned oil company had suspended the naira-for-crude deal until 2030, as it has forward-sold all its crude oil.

Recall that on October 1, 2024, the government commenced the sales of crude oil in naira to local refineries to improve supply, save the country millions of dollars in petroleum product imports, and ultimately reduce the pump prices of refined products.