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Delay In Crude Supply To Dangote Refinery Poses Risk To Nigeria’s Economy – EIU Report
The Economist Intelligence Unit (EIU) has issued a warning that further delays in crude oil feedstock to the Dangote Petroleum Refinery and Petrochemicals could jeopardise Nigeria’s economic recovery and put additional pressure on the naira.
The research and analysis division of the Economist Group said the Dangote refinery which began production in January has encountered setbacks in petrol production due to a shortage of crude oil feedstock.
It noted that the $20 billion facility has successfully exported various products, including fuel oil, naphtha, nitrogen fertilisers, gasoil, jet fuel, and diesel but has been able to ramp up petrol production due to challenges in sourcing adequate crude oil.
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According to the EIU, the delays in crude feedstock to the Dangote Refinery are expected to have significant economic repercussions for Nigeria, potentially worsening the already strained relationship between public finances and the management of the naira, the country’s currency.
The report pointed out that though the government had previously scrapped the official petrol subsidy in June 2023, the practice of unofficially subsidising petrol continues, with substantial implications for the national budget.
It further pointed out that this had led to increased currency losses, contributing to a widening budget deficit which made it increasingly difficult to manage and could force the Central Bank of Nigeria (CBN) to revert to stronger management of the currency.
“As the federal government unofficially subsidises petrol (the official subsidy was scrapped in June 2023), currency losses feed into a widening budget deficit that is becoming more challenging to finance. This provides extra incentive for the central bank to revert to stronger management of the currency, as we already expect, but the degree of market intervention could become heavier. Meanwhile, ongoing fuel imports would reduce the current-account surplus from the 1.9% of GDP that we currently project for 2025, potentially leading to lower foreign reserves and the return to a more rigid and unstable foreign-exchange system,” it said.
The delay in securing a reliable pipeline of affordable crude oil feedstock was attributed to low crude production due to oil theft and underinvestment, as well as using crude oil to repay outstanding loans.
“The refinery has encountered a range of problems, both practical and political in nature. The most publicly discussed issue is how the refinery can secure a reliable pipeline of crude oil feedstock at affordable prices. NNPC, the state oil firm, has not been able to provide enough volume. The government has promised to deliver 450,000 b/d of oil to the refinery through NNPC in a pilot scheme, sold in naira, but the state oil company is not in a position to make this a reliable arrangement. Crude production in Nigeria is stubbornly low, as a result of oil theft and underinvestment. Output was 1.31m b/d in July, against an OPEC+ target of 1.38m b/d. NNPC receives a varying minority share of this and, moreover, a sizable quantity (about 90,000 b/d) is being committed as loan collateral,” it added.
The situation, it said, has been worsened by International Oil Companies (IOCs) operating in Nigeria, which demand a premium of $3-$4 per barrel over the prices they receive elsewhere. It noted that regulators are hesitant to enforce the Domestic Crude Supply Obligation (DCSO) — which requires IOCs to sell crude to local refineries — out of concern that such enforcement might lead to divestment.
The report emphasised that producing fuel locally would significantly benefit Nigeria’s fiscal position and currency, given that petroleum products account for 15% to 20% of the country’s goods import bill.
The Dangote Refinery, hailed as a transformative development, is expected to resolve the paradox of Nigeria being a major crude oil producer yet still dependent on fuel imports. With a capacity of 650,000 barrels per day (b/d), the refinery could potentially eliminate the need for fuel imports and shield local fuel prices from exchange-rate fluctuations.
“The Dangote fuel refinery is potentially transformational for Nigeria, which has always been an oil exporter and fuel importer. This fact is often regarded as a failure and an embarrassment by politicians, businesses and the media alike, but the new refinery has the ability to change this,” it said.
The ship of industrial revolution is about to berth in East Africa, with the continent’s leading industrialist, Alhaji Aliko Dangote, making clear his intention to take the driver’s seat on investments conceived to lead the continent into energy security and industrial revolution.
To this end, Alhaji Dangote whose company operates the largest petroleum refinery on the continent has offered to lead a consortium to build a major crude oil refinery in East Africa, as governments across the region push for greater energy self-sufficiency following supply disruptions linked to the Iran conflict.
The cost profile of the proposed East Africa Refinery was not disclosed but the proposed facility, to be located in the Tanzanian port city of Tanga, is expected to mirror the scale and capacity of Dangote’s flagship refinery in Lagos, which processes about 650,000 barrels per day.
The project is being discussed as a joint regional initiative, with crude supplies expected from Democratic Republic of Congo, Kenya, South Sudan and Uganda.
Kenyan President William Ruto stated at a conference in London that the refinery would serve multiple East African economies, many of which remain heavily dependent on imported refined petroleum products.
The region currently relies largely on supplies from the Middle East, leaving it exposed to global price volatility and logistical disruptions, including those caused by instability around the Strait of Hormuz.
Dangote said he would take the lead in delivering the project if participating governments reached agreement, with a proposed construction timeline of four to five years.
The move reflects a broader shift across Africa toward building domestic refining capacity after recent geopolitical shocks exposed vulnerabilities in fuel supply chains.
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In Nigeria, Dangote’s refinery has already reshaped the domestic energy landscape since operations began in 2024, significantly reducing the country’s long-standing dependence on imported fuel despite being Africa’s largest crude producer.
The facility has also positioned the Dangote Group as a central player in regional energy markets.
The proposed East African refinery is expected to complement emerging upstream production in the region, particularly in Uganda, which is preparing to begin commercial oil output. Kampala has also announced separate plans for a smaller refinery project in partnership with a United Arab Emirates-based investor.
Beyond refining, Dangote indicated plans to expand industrial investments across the continent, including the development of around 20 fertilizer blending plants by 2028 to support agricultural productivity and reduce import dependence.
He also signaled that a future listing of the Nigerian refinery could be opened to African investors, encouraging broader continental participation.
According to Dangote, the expansion strategy is aimed at building integrated industrial capacity that keeps more value within Africa while reducing exposure to external supply shocks.
Analysts say the success of the Tanga project will depend on regional coordination, regulatory alignment and financing, but note that it represents one of the most ambitious attempts yet to create a shared energy infrastructure serving multiple African economies.
The NNPC Limited has raised alarm over what it described as a growing wave of fraudulent claims suggesting that the company is selling refinery scrap materials and equipment to individuals and private entities.
In a public notice by its Chief Corporate Communications Officer, Andy Odeh, the company categorically dismissed the claims as false, clarifying that it has not initiated or approved any process for the sale of scrap metals, refinery components, or equipment from any of its facilities.
According to the company, it has neither issued requests for bids, tenders, nor expressions of interest relating to such transactions, contrary to information being circulated in some quarters.
More troubling, the company revealed that certain individuals have been impersonating NNPC officials, falsely presenting themselves as authorised agents to facilitate the sale of so-called refinery scrap.
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“These individuals are not authorised by NNPC Limited and are attempting to mislead members of the public,” the statement noted, highlighting the sophistication of the fraudulent scheme.
The development raises concerns about the exploitation of public trust and the potential financial risks to unsuspecting individuals and businesses.
NNPC therefore urged stakeholders, corporate organisations, and the general public to exercise vigilance and avoid engaging in any transaction linked to such claims.
“For the avoidance of doubt, NNPC Limited is not conducting, nor has it authorised, any sale of refinery scrap or equipment,” the company reiterated.
It further emphasised that any legitimate disposal of assets would be carried out through transparent, regulated processes and communicated through its official platforms.
The company also encouraged the public to report suspected fraudsters to law enforcement agencies, as part of efforts to curb the spread of such criminal activities.
NNPC reaffirmed its commitment to transparency, accountability, and the responsible stewardship of Nigeria’s energy assets.
The NNPC Foundation Limited/Gte, the Corporate Social Responsibility (CSR) arm of the Nigerian National Petroleum Company Limited (NNPC Ltd), has won the CSR Champion Award (Health) 2025 instituted by the Independent Newspapers.
Biztellers reports that the award was presented during the Silver Jubilee edition of the Independent Newspapers Awards, themed “Game Changers: Breaking Barriers and Shaping Tomorrow,” held at Eko Hotel and Suites on Saturday, 18 April 2026.
The CSR Champion Award (Health) recognises the Foundation’s work in healthcare and its broader commitment to improving lives through social investment programmes spanning health, education, environment, and access to energy.Primary & Secondary Schooling (K-12)
The recognition follows a series of health initiatives delivered by the Foundation, including free cataract screening and surgeries that restored sight to over 6,000 Nigerians, including minors born blind; cancer and glaucoma interventions; medical outreaches to underserved communities; renovation and furnishing of three wards with 100 beds at the National Orthopaedic Hospital, Igbobi; partnership and sponsorship of heart surgeries; and provision of dental health accessories to children in special schools, among others.
The NNPC Foundation noted that these results were made possible through the leadership and support of the NNPC Ltd. Management team, whose commitment has continued to strengthen the Foundation’s capacity to deliver social investments across the country.
Reacting to the award, the Managing Director of NNPC Foundation, Emmanuella Arukwe, described the recognition as a validation of the Foundation’s work and the trust placed in it by Nigerians. She noted that the award means so much to the company because it represents the confidence Nigerians have placed in its work and the value they see in purposeful social investment.
“It speaks to the resilience of the communities we serve, the dedication of our team, and the strength of partnerships that have enabled us to do meaningful work in health, education, environmental sustainability and access to energy,” she added.
In addition, Arukwe noted that “these results have also been made possible through the leadership and support of the NNPC Ltd. Management team, whose backing has been instrumental to the success of the Foundation’s work. We receive this award with gratitude, and with a renewed sense of responsibility to do more and reach further across the country.”
The NNPC Foundation Limited/Gte remains committed to advancing health interventions that improve outcomes and contribute to national development.
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