Dangote Refinery Sets to Process Only Nigerian Oil

Dangote Industries Limited has confirmed that its 650,000 barrels-per-day refinery, the largest in Africa, will transition to processing exclusively Nigerian crude oil by the end of 2025.

Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries, disclosed the plan during an exclusive interview monitored by Bloomberg at the Lekki Free Trade Zone refinery complex near Lagos.

Edwin said that domestic crude producers have already begun ramping up supply, accounting for nearly 50 percent of the refinery’s intake in June.

“We expect some of the long-term contracts with foreign suppliers will expire soon,” Edwin said. “Personally, and as a company, we expect that before the end of the year, we can transition 100% to local crude.”

Since its commissioning earlier this year, the multibillion-dollar refinery has steadily increased its output, positioning Nigeria as a net exporter of refined petroleum products for the first time in decades.

The facility’s move to rely solely on Nigerian crude aligns with the longstanding vision of Aliko Dangote, Africa’s richest man, who has consistently advocated for local processing as a strategic tool to conserve foreign exchange and reduce dependency on costly fuel imports.

Industry data shows that Nigeria, despite being Africa’s top crude oil producer, has historically relied on imports to meet domestic fuel demand, draining foreign reserves and exposing the economy to repeated supply shocks.

The Dangote refinery’s pivot is expected to reverse this trend, providing a steady local market for upstream operators while boosting the country’s balance of payments.

However, the path to 100% local crude supply is not without challenges. Nigeria’s upstream sector has struggled in recent years following the exit of several international oil companies from onshore and shallow-water operations. Many of the domestic firms that acquired these assets often lack the capital and technical capacity to maintain high production levels.

Additionally, the Niger Delta region remains prone to pipeline vandalism, crude theft, and security risks, all of which have historically constrained output. Edwin acknowledged these hurdles but expressed confidence in the sector’s capacity to stabilise as more producers meet export commitments and channel output to domestic consumers.

“Our goal is to support the local market and bring stability and transparency to the oil sector,” Edwin said.

Industry experts believe the refinery’s complete transition to Nigerian oil will have far-reaching implications for the broader economy. Local producers are expected to benefit from guaranteed offtake, creating incentives for new upstream investment and supporting job creation across the value chain.

Bala Zakka, a Lagos-based oil and gas analyst, described the refinery as a critical national asset that could reshape Nigeria’s energy landscape.

“It has the potential to change the narrative of Nigeria being an oil-producing nation that depends on fuel imports. If Dangote succeeds in using only local crude, it will send a strong signal to both investors and policymakers,” Zakka said.

The refinery’s local sourcing strategy coincides with renewed government efforts to attract fresh capital into the sector through the Petroleum Industry Act (PIA). While implementation challenges persist, stakeholders say the Dangote model could become a test case for how effective reforms can translate into tangible benefits for local operators and the wider economy.

Nnimmo Bassey, an energy policy expert, noted that for the refinery’s plan to succeed sustainably, it must be supported by a stable regulatory environment and improved security around crude oil production sites.

“The fact that Nigerian crude is now feeding one of the world’s largest refineries is significant,” Bassey said. “But this must be matched with consistent policy execution and support for local producers.”

The Dangote refinery, with a nameplate capacity to meet Nigeria’s total fuel demand and supply surplus volumes to West African markets, is expected to remain central to the country’s energy security strategy in the coming years.