Dangote Refinery to fully switch to Nigerian crude by end of 2025

Dangote Industries Limited has announced plans for its 650,000-barrel-per-day refinery, the largest in Africa, to source its entire crude oil supply from within Nigeria by the close of 2025. This shift is poised to reshape the nation’s energy landscape and significantly reduce dependence on foreign crude.

The development was confirmed by Devakumar Edwin, Vice President of Oil and Gas at Dangote Industries, during an interview monitored by Bloomberg at the refinery site in the Lekki Free Trade Zone, near Lagos.

Edwin revealed that domestic oil producers already accounted for approximately half of the refinery’s crude supply in June and expressed confidence that this will rise to 100 percent by year-end.

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

Aliko Dangote, Africa’s richest man and the visionary behind the multibillion-dollar refinery, has consistently advocated for refining Nigerian crude within the country instead of exporting it and importing refined products at a premium. He argues that this model saves foreign exchange, curbs revenue losses, and cushions the economy from global supply disruptions.

Since launching operations earlier this year, the Dangote Refinery has gradually increased its output, positioning Nigeria as a net exporter of refined products for the first time in decades. However, this milestone has not been without challenges.

Due to insufficient local crude availability, the facility initially relied heavily on imports, primarily from the United States and other foreign suppliers.

The shortfall stems in part from Nigeria’s struggling upstream sector. In recent years, international oil companies (IOCs) have sold off their onshore and shallow-water assets to indigenous firms, many of which lack the financial and technical capacity to maintain high production levels.

Security concerns, pipeline vandalism, and widespread crude theft in the Niger Delta have further strained supply chains and delivery infrastructure.

Despite these setbacks, Edwin expressed optimism about future prospects: “As more local producers meet their export obligations and redirect supply to domestic demand, we believe crude availability will improve. Our aim is to strengthen the local market and introduce stability and transparency in the oil sector.”

A full transition to local crude will mark a pivotal moment for Nigeria. Despite being Africa’s top oil producer, the country has long depended on imported fuel to meet domestic needs ,  an inefficiency that has eroded foreign reserves and led to recurrent fuel scarcity and price instability.

Conceived as a long-term solution to this imbalance, the Dangote Refinery boasts the capacity to meet Nigeria’s fuel requirements and export surplus to neighbouring West African markets.

Experts note that sourcing crude locally will not only provide a stable market for struggling indigenous producers but also encourage renewed investment in upstream assets and boost Nigeria’s balance of payments.

“This refinery is a national asset,” said Lagos-based oil and gas analyst Bala Zakka. “It has the potential to rewrite Nigeria’s energy story ,  from being a crude exporter and fuel importer to becoming self-sufficient and regionally dominant. If Dangote achieves full local crude usage, it will be a powerful signal to both investors and policymakers.”

The refinery’s localisation drive comes at a time when the federal government is keen to attract fresh investment into the oil and gas industry, particularly through the Petroleum Industry Act (PIA), signed into law in 2021. The Act is designed to foster a more transparent and investor-friendly regulatory framework, although implementation has faced criticism over delays and inconsistencies.

Observers suggest that Dangote’s ability to consistently source crude from local producers could serve as a real-world test of the PIA’s success.

“The fact that Nigerian crude is now fuelling one of the world’s largest refineries is already a win,” said Nnimmo Bassey, an energy policy expert. “But long-term success depends on securing production, tightening regulation, and supporting local operators throughout the value chain.”