Nigeria’s much-anticipated Dangote Oil Refinery has begun ramping up production, with a surprising twist: a significant portion of its crude oil is coming from the United States.
This 650,000 barrel-per-day behemoth, located near Lagos, started operations in December 2023. While initially expected to rely solely on domestic crude from the Nigerian National Petroleum Corporation (NNPC), recent reports indicate up to one-third of its current feedstock is US-grade WTI Midland crude, according to shipping data compiled by Bloomberg.
Analysts believe this shift is likely due to the competitive pricing of U.S. oil compared to domestic options. However, this practice could change soon. The Nigerian government recently introduced new rules mandating domestic oil producers to sell crude to local refineries in a bid to reduce reliance on imported refined products.
The Dangote Refinery’s arrival is a potential game-changer for Nigeria, a nation that has historically depended heavily on imported fuel. This refinery has the capacity to not only meet domestic needs but also transform Nigeria into a regional fuel exporter.
Earlier this week, the refinery set the pump price of diesel, also known as Automotive Gas Oil (AGO) at N1,000 per litre, representing a significant drop from the previous price of N1,200. The company said the price slash is because of its focus on making a positive impact on the Nigerian economy. According to a statement released by the company, the price reduction “will positively affect all sectors of the economy and ultimately reduce the high inflation rate in the country.”
