The Federal Government is considering a reduction in its crude oil supply to the Dangote Petroleum Refinery, lowering its current allocation from 300,000 barrels per day. This decision is expected to be part of adjustments under the government’s naira-for-crude initiative, set to take effect following the recent start of operations at the Warri and Port Harcourt refineries.
Sources close to the matter disclosed that the reduction, which is contingent on a potential surge in Nigeria’s oil output, aims to ensure an adequate and balanced supply of crude to all domestic refineries. The Warri and Port Harcourt refineries, managed by the Nigerian National Petroleum Company Limited (NNPCL), currently operate at a combined capacity of approximately 135,000 barrels per day.
The government’s new strategy comes after years of neglect of local refining infrastructure, which led to a reliance on fuel imports. With the refineries now in operation, the government aims to boost competition in the downstream sector, thus promoting efficiency and sustainability.
Before the introduction of the naira-for-crude initiative, the government had been allocating roughly 445,000 barrels of crude oil per day to its domestic refineries. The anticipated changes are expected to better distribute crude supplies across multiple refineries, fostering healthier competition in the oil sector while encouraging the growth of domestic refining capabilities.
