Nigeria’s oil sector is facing renewed uncertainty as Dangote Petroleum Refinery has concluded plans to import 13.62 million barrels of crude oil for May 2026, despite the Federal Government’s naira-for-crude arrangement aimed at boosting domestic supply. The move reflects a growing mismatch between local crude availability and refinery demand, raising fresh concerns about fuel pricing and economic stability.
The refinery, which has a capacity of 650,000 barrels per day, requires about 19 million barrels for the period. However, available data indicates that only 6.15 million barrels will be supplied domestically, leaving a significant shortfall. Consequently, the refinery has opted to source the remaining volume from international markets, pushing its import volume to about 139.5 per cent of its total requirement.
At the current international price of $110 per barrel, the planned import is estimated to cost approximately $1.498 billion. In naira terms, this translates to about ₦2.07 trillion using an exchange rate of ₦1,380.79 per dollar, further increasing pressure on Nigeria’s foreign exchange demand.
Industry stakeholders have warned that the increasing reliance on imported crude may sustain high fuel prices in the domestic market. According to the National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Dr. Billy Gillis-Harry, fluctuations in refined product prices are likely to intensify. He explained that once fuel prices begin to rise, transportation costs will follow the same trend, which in turn could trigger higher food prices and broader inflation across essential goods.
In a related development, the National President of the Oil and Gas Service Providers Association of Nigeria, Mazi Colman Obasi, noted that the Dangote Refinery was not designed to depend solely on Nigerian crude. He stated that if the refinery continues to import crude, it will also prioritize the export of refined products to maintain commercial viability. While such exports may support foreign exchange inflows and macroeconomic stability, he cautioned that the benefits may not immediately translate into improved living conditions for average Nigerians.
Energy analysts have also described the situation as paradoxical, pointing out that Nigeria remains a major crude oil producer yet struggles to supply its largest refinery. The Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, stressed the need for coordinated efforts to improve upstream production and ensure consistent domestic supply. He added that refining pricing mechanisms under the naira-for-crude framework must be strengthened to achieve long-term sustainability.
Another industry expert highlighted additional risks associated with crude importation, noting that international sourcing exposes the refinery to currency volatility and rising logistics costs. The expert further explained that dependence on global markets increases vulnerability to geopolitical disruptions and shipping uncertainties, which could lead to unpredictable cost fluctuations. Over time, these challenges may place further strain on the naira and Nigeria’s foreign reserves while weakening confidence in government supply interventions.
Recent data has also shown that previous supply targets were not fully achieved. In the first half of 2025, the Nigerian Upstream Petroleum Regulatory Commission projected the supply of 770,500 barrels per day to domestic refineries, representing about 37 per cent of expected national production. However, actual delivery fell short of expectations due to limited crude availability, despite initiatives aimed at boosting output.
Despite these concerns, the Presidency has maintained that the naira-for-crude initiative continues to strengthen Nigeria’s resilience against global energy shocks. According to Senior Special Assistant to the President on Media and Publicity, Temitope Ajayi, the policy has helped stabilize supply and reduce exposure to international volatility. He noted that global disruptions, including tensions affecting key oil routes, have driven up energy prices worldwide, yet Nigeria has managed to maintain relative stability due to local refining capacity.
He also pointed out that Dangote Refinery has contributed to product availability and reduced fuel scarcity, while recently lowering petrol prices by ₦75 per litre despite higher crude acquisition costs. This, he said, demonstrates the strategic importance of domestic refining in cushioning the impact of global price fluctuations.
Nonetheless, the growing reliance on imported crude underscores structural challenges within Nigeria’s oil sector. If domestic supply constraints persist, petrol prices are likely to remain elevated, potentially exceeding ₦1,300 per litre in the near term. Ultimately, sustained improvements in crude production, policy execution, and supply chain coordination will be critical in determining whether Nigeria can achieve stable and affordable fuel pricing.
