Dangote Refinery Faces Crude Supply Shortfall in Nigeria

Dangote Refinery's Chief Executive Officer, David Bird, expressed concerns regarding Nigeria's inability to supply sufficient crude oil, receiving only five cargo shipments, which is 30% of the expected volumes. The refinery operates at full capacity of 650,000 barrels per day and requires 13-15 cargo shipments monthly to meet domestic fuel demand.

Bird highlighted that the government's crude supply arrangements have fallen significantly short of agreed volumes, undermining the effectiveness of the crude naira arrangement designed to supply crude to local refiners at international prices without foreign exchange exposure. He noted that the allocation of crude quality has not met demand, and the existing allocation methodology lacks transparency.

The refinery has had to turn to the international market to source crude, incurring significant premiums. Despite these challenges, the refinery is designed to process a wide variety of crude types, with 30-40% of its feedstock sourced from foreign markets to sustain operations.