•Low output impacts domestic crude supply — Reports

• Bulk of crude dedicated to future contracts — CPPE

•Imported petrol drops 7.45% to 998,500 metric tons

•More vessels deliver crude oil, load refined products — Consultant

•We are seeing favourable trade balance, foreign exchange — MEMAN

By  Udeme Akpan &Godwin Oritse

Nigeria has recorded a sharp increase in its crude oil import by 26.5 per cent to 5,665,602 metric tons in the first half of 2025 (H1’25), from 4,478,413 metric tons in the corresponding period of 2024.

The development was attributed to the impact of the 650,000 barrels per day, bpd Dangote Petroleum Refinery, which imported crude oil from many nations, including the United States, Brazil, Angola, and Equatorial Guinea.

However, Financial Vanguard’s  quarterly analysis revealed a mixed picture, indicating that in Q1’25, crude imports stood at 2,400,553 metric tons, 30 per cent lower than the 3,037,209 metric tons recorded in Q1’24, according to fresh data from the Nigerian Ports Authority, NPA.

But in Q2’25, crude oil imports surged to 3,265,099 metric tons, 126 per cent more than the 1,441,204 metric tons posted in Q2’24.

The Dangote Refinery started operations on May 22, 2023 and refining diesel and aviation fuel in January 2024 after receiving its first crude in December 2023.

Since then, the refinery has imported many shipments of crude oil into Nigeria while exporting cargoes of petroleum products to the global market.

Specifically, the nation exported 998,500 metric tons of Premium Motor Spirit (PMS), also known as petrol in H1’25, representing a 7.45 per cent decline, compared to the 1,078,912 metric tons in H1’24, according to NPA.  

Low output impacts domestic crude supply — Reports

In its Domestic Crude Oil Supply Obligation, the government had planned to produce 2.06 million barrels per day, bpd, including Condensate, during the period.

Of the 2.06 million bpd planned output, 770,500 bpd, about 37 per cent was to be supplied to the domestic refineries, including Dangote Petroleum Refinery, to enable them sustain operations.

However, NUPRC disclosed in its reports titled ‘Crude Oil and Condensate Production’  that the nation produced 1.737 million bpd, 1.671 million bpd, 1.603 million bpd, 1.683 million bpd, 1.657 million bpd and 1.697 million bpd in January, February, March, April, May, June and July 2025, respectively. 

It maintained that a total of “67,657, 559 barrels were delivered to local refiners between January and August 2025.” 

Bulk of crude dedicated to future contracts — CPPE

In his reaction, Chief Executive Officer, Centre for the Promotion of Private Sector Enterprise, CPPE, Dr. Muda Yusuf, said Dangote Refinery’s reliance on foreign crude was a result of Nigeria’s constrained domestic supply.

He explained that much of Nigeria’s crude output had been committed through forward sales agreements to international buyers, leaving limited availability for local refiners.

He said: “Over time, a significant portion of our crude has been sold through forward contracts, with payments collected in advance to finance refinery turnaround maintenance and other expenditures. That arrangement has limited the volume of crude available locally.

“Don’t forget, much of Nigeria’s oil production is structured through joint ventures with International Oil Companies, IOCs, which limits unilateral domestic allocation. These are the realities Dangote Refinery is facing.”  

More vessels deliver crude oil, load refined products — Consultant

On his part, a Maritime analyst and consultant, Oluwabunmi Ogunjimi, noted that while the refinery had not only significantly added value to Nigeria’s oil and gas industry, it had contributed to government revenue through the payment of ship dues and other statutory taxes.

Ogunjimi said Dangote has the potential to become the biggest revenue source for the Nigerian Ports Authority, particularly through the payment of pilotage dues, given the massive sizes of vessels calling at the nation’s waters.

He explained that before the establishment of Dangote Refinery, crude oil exploration and the logistics of refined products brought little or no shipping value. However, the refinery has since transformed the dynamics of the shipping sector.

He said: “Let us look at it from the perspective of the fact that before nothing was being exported as far as petroleum products are concerned, we were still exporting crude. A lot of our feedstocks have been contracted.

“What Dangote has done is that he has created a downstream industry here because the whole idea of crude oil coming here is economic activities down the value chain, starting from shipping, meaning that more vessels are coming here to deliver crude oil and load refined products.

“These vessels pay ship dues, towage fees, pilotage due and other taxes. You will be shocked to know that Dangote Petroleum Refinery is now one of the major revenue earner for NPA because the vessels that call at our waters are huge, Very Large Crude Carrier, VLCC, and ship dues are paid based on the size of the vessels.

“Nigeria did not even had the capacity for Dangote’s Refinery, you know he is using Single Buoys Mooring, SBM, underground pipes which is about 30 kilometres from the refinery to the vessels offshore to transport crude oil and 30 kilometers backward. Crude comes in, it is refined and it goes out to the global market.

“Either way, Dangote is creating economic activities in the shipping sector, if you consider the shipping sector, the economic activity is unbelievable, both in and out. Remember that these vessels that come to Nigeria would have had no business coming to Nigeria in the first place.

“He is providing shipping activities that come with commercial contents, more ships, tankers are coming here to deliver crude, providing jobs, increasing ship movements, increasing our tonnage and value for the International Maritime Organisation, IMO, so it is a win-win for Nigeria.

“In IMO, one of the ways you are ranked is through your tonnage. So, you can imagine the vessels bringing in crude oil to the vessels coming to load refined products and what Dangote produces, is to international specification.”  

We are seeing favourable trade balance, foreign exchange — MEMAN

Similarly, Chief Executive Officer of the Major Energy Marketers Association of Nigeria, MEMAN, Mr. Clement Isong, noted that Nigeria’s importation of crude was not unusual, as even major oil-producing nations engage in similar practices.

According to him, “Dangote Refinery sources part of its feedstock locally. However, since its demands cannot be met, Dangote has to import additional crude to bridge the gap.”  

Prospect of increasing output

In an interview with  Financial Vanguard, weekend, the National President of the Oil and Gas Service Providers association of Nigeria, Mazi Colman Obasi, said: “Exploration and production of crude oil take medium and long time. Not much can be done on a short term. The government and International Oil Companies, IoCs are currently executing major projects. But they would take many years to complete and put on stream.

“This means that the nation and other parties should not expect a dramatic increase in oil output immediately. But there is nothing to worry about because crude oil remains an international commodity, which nations, including Nigeria should be free to export and import in times of need. Remember, Nigeria used to import heavy crude to process locally. It is not a crime to import crude oil.”

However, the government  disclosed that it has “launched Project 1 million Barrels which is expected to favourably impact the national production. NUPRC is leveraging the capacity of upstream operators to meet the target daily production of Two Million, Five Hundred Thousand Barrels (2,500,000 Bopd) in the short term.”

It added: “This strategic initiative aligns with Nigeria’s commitment to bolstering its domestic refining capacity and ensuring the sustainability of its oil industry. The first half of 2025  witnessed increased synergy between local refineries and producing companies, setting the stage for a more robust and self-reliant petroleum landscape in Nigeria.”

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