Optimism over improved domestic refining output and cheaper petroleum products at the Dangote Petroleum Refinery & Petrochemicals (DPRP) now hang in the balance in the face of a 62 percent crude oil supply shortfall.

The $20 billion, 700,000 barrels per day facility, which began operations in 2021, is facing a severe crude supply shortfall of eight cargoes per month.

To operate at optimal capacity, the refinery requires 13 cargoes (ships) of crude monthly as against five cargoes currently being supplied by the Nigerian National Petroleum Company Limited (NNPC Ltd).

This was detailed in a report by the African Energy Council (AEC), which highlighted that the refinery is currently running at a third of its crude oil requirement.

The report lamented that the refinery running at a shortfall is not because the feedstock does not exist in Nigeria, but because the system supplying it has a vested interest in keeping the import window open.

The AEC added that the decision of the DPRP to file a suit against the Federal Government, NNPC Ltd and downstream regulator is less a legal story and more of a governance issue.

“When your mandated crude supplier competes with you in the same market, a shortfall of eight deliveries per month stops being a logistics problem and starts looking like a structural one,”, the report noted.

It added that the Petroleum Industry Act (PIA) 2021 was supposed to settle this.

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Specifically, the AEC noted that Section 317(9) served as an implicit agreement with private investors to refine locally, meet domestic demand, and operate in a context where import competition is effectively limited.

“That compact is now being tested in a Lagos courtroom and the outcome will say far more about Nigeria’s investment credibility than any roadshow ever could”.

The think-tank group pointed out that the real cost is not felt in Ibeju-Lekki but at the pump, at the CBN’s FX desk and in boardrooms across the continent watching to see whether Nigerian energy law means what it says.

The AEC argues that Dangote’s crude dispute lays bare a governance failure that no court ruling can fully fix.

The body lamented that a state oil company acting as both supplier and competitor to the very refinery built to end Nigeria’s import embarrassment is a conflict of interest hiding in plain sight.

“Until NNPC’s commercial and regulatory roles are cleanly separated, the PIA remains a promise on paper, and Africa’s most ambitious private energy investment stays hostage to institutional self-interest,” it noted.

The drop in crude supply to the Dangote refinery is further supported by latest data released by the Nigerian Midstream Downstream Petroleum Authority (NMDPRA) for the month of May.

The report indicated that crude oil deliveries to Dangote, including other local refineries declined during the review period. Refiners received an average of 578,000 barrels of crude oil per day in May, down from 612,000 barrels per day in April, representing a decrease of 5.6 percent.

Industry observers pointed out that the development suggests that while local refining capacity continues to expand, refiners may still be facing operational and feedstock challenges that require supplementary imports to bridge supply gaps and maintain market stability.

The acquisition of an additional 40 percent interest in ND Western Limited, has seen Aradel Holding grow its total assets by a whopping 466 per cent to N9.9 trillion in the 2025 financial year.

Biztellers reports that the transaction conferred majority shareholding on Aradel, as its equity stake in Renaissance rose to 53.3 percent.

According to the energy company, the transaction, completed on December 31, 2025, also significantly expanded its reserves, production base and operational footprint, leading to a sharp increase in the size of its balance sheet.

Going by its audited results for the year ended December 31, 2025, total assets rose from N1.75 trillion in 2024 to N9.9 trillion, reflecting the consolidation of ND Western’s assets and liabilities and the carrying value of Aradel’s effective interest in Renaissance.

The company also reported a 192 percent increase in profit after tax to N757.3 billion from N259.1 billion in the previous year, while revenue rose by 20 percent to N699.4 billion from N581.2 billion.

In the same vein, operating profit increased by 152 percent to N733.6 billion from N291.4 billion, while earnings from associates rose by 246 per cent to N109.5 billion.

Aradel noted that the operational and income statement figures for 2025 do not include contributions from the newly acquired businesses because the transactions were completed on the last day of the financial year. It said only the balance sheet impact was consolidated as of December 31, 2025, while the full operational and earnings contributions are expected to be reflected from 2026.

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On the results, Chief Executive Officer, Adegbite Falade, said, “2025 was a defining year as we continued to strengthen our position as an integrated energy operating platform. We delivered record revenue and profitability, while executing the most transformational strategic expansion in our history.

Our additional 40 percent investment in ND Western and the resultant increase in our total effective interest in Renaissance (53.3 percent) significantly expanded our reserves, production base and operational footprint, positioning Aradel to operate at materially greater scale from 2026 onwards.”

On operations, crude oil production rose by three per cent to 14.1 thousand barrels per day from 13.8 thousand barrels per day in 2024, while gas production increased by 59 percent to 51.4 million standard cubic feet per day from 32.4 million standard cubic feet per day.

The company recorded crude oil sales of 4.1 million barrels during the year, up 32 per cent from the previous year, while refined product output increased by 18 percent to 313.4 million litres. Refinery utilisation improved to 49 percent from 40 percent in 2024. Gas revenue increased by 72 percent to N48.6 billion, while refined products revenue rose by 18 percent to N210.8 billion. Crude oil exports remained the largest revenue source, contributing N440.1 billion, or 63 percent of total revenue.

The company reported net cash generated from operating activities of N179.7 billion, compared with N311.9 billion in the previous year, while cash and cash equivalents rose to N1.5 trillion at the end of the period from N411.8 billion a year earlier.

Aradel’s board proposed a final dividend of N23 per share, bringing the total dividend for the 2025 financial year to N33 per share, compared with N26.4 per share paid for 2024.

Falade said the company would focus on integrating its expanded asset base, increasing production and diversifying revenue streams. “The consolidation of NDW and Renaissance fundamentally reset the scale of the Company’s balance sheet, giving us the asset and reserve base to underpin our future expansion. Our 2025 audited accounts therefore capture the balance-sheet impact of these acquisitions; their full earnings contribution will be reflected in the Group’s consolidated financial results from 2026 onwards.”

Reports that Iran has shut the strategic Strait of Hormuz, a strategic international shipping route again has sparked fresh concerns over global oil prices.

This latest shutdown comes barely 24 hours after it was reopened on the heels of a ceasefire arrangement with the United States.

According to a New York Post report which quoted the Islamic Revolutionary Guard Corps (IRGC), Iran cited a continued presence of United States forces in the region and Israel’s refusal to pull military forces out of southern Lebanon, where it had been pounding Hezbollah terrorists.

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The IRGC said the US violated the memorandum of understanding between Washington and Tehran, which President Donald Trump and Iranian President Masoud Pezeshkian signed last Wednesday.

The latest development has revived fears of disruptions to global crude oil supplies and a fresh rally in international oil prices, a scenario that could shake Nigeria’s downstream petroleum market.

The Strait of Hormuz remains one of the world’s most critical energy corridors, serving as the transit route for nearly a fifth of global oil consumption.

Any disruption along the waterway typically triggers nervous reactions in oil markets and raises concerns over energy security.

Industry observers warned that a prolonged closure could push crude oil prices higher, increase the cost of imported petroleum products and ultimately force a fresh upward adjustment in petrol prices across Nigeria.

For many Nigerians already grappling with high transportation and living costs, another spike in fuel prices would deepen existing economic pressures.