Reported by: Oahimire Omone Precious | Edited by: Oravbiere Osayomore Promise.
Lagos, Nigeria — Aliko Dangote, President and Chief Executive of Dangote Industries Limited, has publicly criticised major international oil companies operating in Nigeria for what he described as an unwillingness to sell crude oil directly to the Dangote Petroleum Refinery, a dynamic that he says forces Africa’s largest refining complex to repurchase its own crude at higher cost and undermines efforts to boost Nigeria’s energy security and economy. The remarks come amid ongoing challenges in securing sufficient domestic crude feedstock for the refinery, which, despite its capacity, continues to grapple with inconsistent local supplies. Recent developments place the issue at the centre of national debates on energy policy, the future of local refining, and Nigeria’s ability to derive more value from its vast crude reserves.
Dangote made his observations during a high-profile engagement at the Ibeju-Lekki refinery complex in Lagos, where he received the Deputy Secretary-General of the United Nations, Amina Mohammed. While acknowledging recent improvements, he said the refinery still receives far less domestic crude than it needs to run at optimum levels. According to Dangote, the Nigerian National Petroleum Company Limited (NNPC) recently increased deliveries to 10 crude cargoes last month — six paid for in Nigerian naira and four in U.S. dollars — but this is still well below the roughly 19 cargoes required for smooth operations. He stressed that international oil majors frequently prefer to sell their crude to traders on the global market rather than supply it directly to the refinery, meaning that the facility ends up buying back volumes at higher prices, which ultimately puts upward pressure on fuel costs.
“The higher we pay for these barrels, the higher the cost of petroleum products, because we have to pass on those costs,” Dangote explained, underlining the ripple effects on Nigeria’s foreign exchange expenditures and domestic energy pricing. His comments reflect long-standing frustrations within the industry about the disconnect between Nigeria’s abundant crude output and the ability of local refineries to access that oil at competitive rates.
Experts and industry stakeholders say the situation underscores structural issues in Nigeria’s oil sector, where upstream producers — many of them international oil companies — have historically prioritised exporting crude for foreign earnings. Despite being Africa’s leading crude producer, Nigeria’s refiners have regularly fallen short of required local feedstock, often turning to imported barrels from the United States and other African producers to fill the gap. Data shows crude imports by Nigeria’s refineries surged significantly in 2025, reaching an estimated N5.7 trillion in value, as domestic supply shortages persisted even amid strong overall production. This disconnect has reinforced the paradox of a major oil producer importing crude while local refining capacity remains under-utilised.
The reluctance of international oil companies to sell directly to Dangote’s refinery has also been flagged in previous industry discussions. Critics argue that while some producers have cited constraints such as production shortfalls, infrastructure challenges, and security concerns, commercial behaviour that favours offshore traders over domestic refiners undermines policy goals aimed at reducing Nigeria’s dependence on imported finished fuels. A spokesperson for the Dangote Group in the past refuted claims that the refinery was reselling crude, emphasising that it remained focused on refining outputs and not trading raw barrels, even as supply challenges persisted.
Domestically, this supply dynamic has broader implications for Nigeria’s economy. The ongoing preference for exporting raw crude and importing refined fuel places significant strain on foreign exchange reserves. It also blunts the economic gains anticipated from the Dangote Refinery, which was conceived not only to meet domestic demand but to position Nigeria as a key supplier of refined products across West, Central and East Africa. Over recent months, the facility has increased gasoline and urea exports to help cushion regional supply shortages exacerbated by global market disruptions. These sales to African markets have been welcomed by governments seeking stable energy inputs, yet Nigeria continues to struggle with record-high fuel prices at home, partly due to the cost of imported crude and the pricing benchmarks that drive the downstream market.
Adding to the debate, energy analysts have pointed out that while the doubling of crude deliveries from the NNPC is a positive development, it falls short of resolving structural pricing and supply issues. Some industry watchers warn that without deeper government intervention — such as subsidies to support local refiners or policy reforms requiring or incentivising upstream producers to prioritise domestic delivery — Nigerians may continue to face fuel availability but not affordability. Critics argue that even when cargoes are denominated in naira, local crude pricing tied to international benchmarks means that fuel at the pump remains sensitive to global market forces.
Nigeria’s policy environment has been evolving in response. Past initiatives such as the naira-for-crude arrangement between NNPC and Dangote Petroleum Refinery were aimed at conserving foreign exchange and improving feedstock access, although the implementation has been inconsistent and fraught with operational challenges. Even where such mechanisms have been applied, local crude supply obligations have been difficult to enforce across the board, in part due to resistance from some upstream operators.
For everyday Nigerians, the intersection of crude supply behaviour and fuel pricing continues to have tangible effects. While the Dangote Refinery’s output has helped avert crippling fuel shortages and has stabilised product availability, the persistence of high pump prices remains a source of public concern. Many commentators argue that only a comprehensive alignment of upstream production with local refining demand, supported by clear policy enforcement and incentives, can unlock the full economic promise of Nigeria’s oil value chain and deliver sustainable relief at the consumer level.
As Nigeria and its partners navigate these challenges, the broader goal remains clear: transform crude oil wealth into affordable, reliable energy that supports economic growth, currency stability and regional energy security. Whether international oil companies respond to Dangote’s call for deeper engagement with local refining needs will be a key test of that ambition.
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