Post 2 of The Oil Windfall Series
Read that headline again slowly.
Nigeria — Africa’s largest crude oil producer — is spending the equivalent of ₦2 trillion to import crude oil it does not have enough of.
Not refined fuel. Not kerosene. Not diesel.
Crude oil. The raw material we dig out of our own ground.
And it is not because we ran out of crude. It is because the system that was designed to get our own crude to our own refinery is not working.
This is not a metaphor. It is not a political slogan. It is a verifiable, documented fact — published in April 2026, confirmed by Vanguard, Reuters, CNBC Africa, Punch, and OilPrice.com simultaneously.
Let us walk through it carefully. 🧵
📌 FIRST, UNDERSTAND WHAT THE DANGOTE REFINERY WAS BUILT TO DO
The Dangote Petroleum Refinery, located at Lekki, Lagos, is the largest single-train refinery in the world. It cost over $20 billion to build — financed largely by Afreximbank and a consortium of lenders, with $2.5 billion from Afreximbank alone.
At full capacity, it processes 650,000 barrels of crude oil per day — enough to meet 100% of Nigeria’s domestic fuel needs, with surplus left for export.
Think about what that means. One refinery. Built by one Nigerian businessman. Capable of ending our dependence on imported fuel entirely.
The logic was simple and beautiful: Nigeria produces crude. The refinery sits in Nigeria. The crude goes into the refinery. Nigeria gets its own fuel. No more importing petrol with scarce dollars. No more being at the mercy of Rotterdam or Singapore pricing. No more fuel queues.
That was the promise. That was the plan.
Now here is what is actually happening. 👇🏾
📌 THE NUMBERS THAT SHOULD MAKE EVERY NIGERIAN SIT UP
For the month of May 2026, Dangote Refinery needs approximately 19 million barrels of crude to run at full capacity.
The Federal Government — through NNPC — is expected to supply just 6.15 million barrels.
That leaves a shortfall of nearly 13 million barrels — every single month.
To fill that gap, the refinery has concluded plans to import 13.62 million barrels of crude from international markets.
At the prevailing price of $110 per barrel, that imported crude will cost approximately $1.498 billion — which, at the current exchange rate, translates to roughly ₦2.07 trillion. 💸
Let that number breathe for a moment.
Nigeria is spending ₦2 trillion in a single month to import crude oil — not because we have no crude oil, but because the crude oil we have is not being directed to our own refinery.
As Jeremiah Olatide, CEO of Petroleumprice.ng, put it bluntly: “Nigeria is a major crude oil producer, yet its largest refinery depends on imported crude.”
He called it what it is: a paradox.
📌 HOW DID WE GET HERE? THE NAIRA-FOR-CRUDE STORY
On October 1, 2024, President Tinubu launched the Naira-for-Crude initiative — an arrangement under which NNPC would supply crude oil to the Dangote Refinery in exchange for naira, not dollars.
The idea was elegant and patriotic. If our refinery could buy Nigerian crude in naira — our own currency — it would:
✅ Reduce pressure on foreign exchange reserves
✅ Strengthen the naira
✅ Keep refined fuel prices lower than import-parity pricing
✅ Give the refinery the feedstock it needs at a predictable cost
The initiative was welcomed. Analysts praised it. The Presidency promoted it as a model of economic nationalism.
There was just one problem.
NNPC did not consistently supply the crude.
A Punch investigation found that from the very beginning of the arrangement, NNPC had consistently failed to provide the agreed 350,000 barrels per day to the refinery. At best, it was supplying around 120,000 barrels per day. By February 2025, supply had reportedly halted completely for a period.
The cumulative shortfall between October 2025 and mid-March 2026 alone was estimated at 79.53 million barrels of crude that should have gone to the refinery but did not.
Here is a month-by-month picture of what the refinery was supposed to receive versus what it actually got:
📌 WHERE IS THE CRUDE GOING INSTEAD?
This is the question that demands an answer.
Nigeria is producing crude oil — roughly 1.46 to 1.58 million barrels per day in recent months, according to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The crude exists. So why isn’t it reaching the refinery?
Several factors are at play:
🔴 Forward oil-backed loans. A significant portion of NNPC’s crude is committed as collateral for loans Nigeria took — some dating back years. Before a single barrel reaches the Federation Account, it is already pledged to creditors. This is sometimes called “crude-backed financing” — and it has been a quiet drain on Nigeria’s oil revenues for over a decade.
🔴 Dollar preference. With Brent crude now above $110 per barrel, the temptation to sell crude in dollars on the international market — rather than in naira to the refinery — is commercially powerful. Dollar revenues benefit NNPC’s bottom line and help service external debts. The Punch noted pointedly that “NNPC operatives prefer to trade petroleum in US dollars” — especially during a price spike.
🔴 Section 109 of the Petroleum Industry Act (PIA) is being ignored. This section of the PIA — Nigeria’s landmark oil sector legislation — explicitly requires NNPC to prioritise the supply of crude to domestic refineries before exports. A senior Dangote Refinery official told Punch that the consistent shortfall raises serious concerns about compliance with this statutory obligation.
🔴 Upstream producers also refusing to supply. It is not just NNPC. The refinery has stated publicly that Nigeria’s upstream producers — the oil companies extracting crude — have also failed to supply crude as required under the PIA, forcing the refinery to source from international traders at significant premiums.
📌 THE PREMIUM PROBLEM — PAYING MORE FOR WHAT WE ALREADY OWN
Here is where the story becomes even more painful.
When Dangote Refinery sources crude from the international market instead of from Nigerian fields, it does not just pay the standard market price. It pays a premium on top.
According to a refinery official speaking to Reuters, the refinery recently had to pay premiums of as much as $18 per barrel above the Brent crude benchmark to secure international cargoes. At $110 Brent, that is $128 per barrel — for crude that Nigeria produces and exports at $110.
Think about that. We sell our crude at $110. Our own refinery buys it back from international traders at $128. The $18 difference per barrel goes to foreign intermediaries — not to Nigerian workers, not to the Federation Account, not to FAAC, not to state governments.
And this premium is directly reflected in the fuel pump price that Mama Chioma pays every time she buys petrol. 🥺
📌 THE CASCADING EFFECT ON YOUR FUEL PUMP PRICE
The mathematics of this misalignment flows directly to the filling station near you.
Dangote Refinery opened 2026 selling ex-depot petrol at ₦699 per litre. By late March 2026, that price had climbed to ₦1,200 per litre — a 71.67% increase in one quarter. The refinery revised prices nine times between January and March alone.
Each price revision tracks almost perfectly with the cost of sourcing imported crude. When Brent rose above $80 in early March, depot price rose to ₦874. When Brent crossed $100, it jumped to ₦995. When Brent crossed $110, it climbed to ₦1,200.
The refinery is not making extraordinary profits from these increases. It is passing through the cost of buying crude — at international prices, with premiums, in dollars — to Nigerian consumers.
The structural irony is complete: Nigeria’s refinery is buying Nigerian crude at international prices, because the system designed to supply it domestically has failed. And ordinary Nigerians are paying for that failure at the pump.
📌 BUT ISN’T THE REFINERY NOW EXPORTING? YES — AND HERE IS WHAT THAT MEANS
There is a dimension to this story that deserves honest examination.
On April 6, 2026, Aliko Dangote himself conducted a media tour of the refinery. He confirmed it is operating at full capacity of 650,000 barrels per day. He announced that the refinery has begun exporting gasoline and urea to African countries hit by supply disruptions from the Iran war. South Africa, Ghana, Kenya, and other countries are reportedly in discussions for long-term supply arrangements.
This is genuinely impressive. A CBN balance of payments report confirmed that in 2025, the refinery generated $5.85 billion in refined petroleum exports — a line that barely existed before. It also helped cut Nigeria’s petroleum product imports by nearly 29 percent — from $14.06 billion in 2024 to $10 billion in 2025.
These are real economic gains. They should be acknowledged. 👏🏾
But here is the civic education tension your audience must hold:
The refinery is exporting refined products to other African countries at a time when its own country is paying ₦1,200 per litre for petrol and the refinery needs to import crude because NNPC is not supplying enough.
Mazi Colman Obasi, National President of the Oil and Gas Service Providers Association of Nigeria, said it directly: “If the refinery must import crude, then it will also need to export refined products to remain commercially viable. While exports may bring in foreign exchange and support macroeconomic stability, the reality is that this may not significantly improve the living conditions of the average Nigerian.”
That is the honest summary. The macro numbers improve. The micro pain persists.
📌 THE LEGAL OBLIGATION THAT IS BEING IGNORED
This point cannot be made often enough, because it transforms this from an economic story into a governance accountability story.
Section 109 of the Petroleum Industry Act is clear and unambiguous. Before NNPC exports a single barrel of crude oil, it is legally required to meet domestic refinery demand first.
The Dangote Refinery has been receiving between 23% and 33% of its monthly crude requirement from domestic sources. The rest — 67% to 77% — has been going elsewhere, while the refinery imports at $128 per barrel.
If a law exists that says domestic refineries must be prioritised — and that law is not being followed — then someone must answer the question:
Who is accountable for the breach? And what consequences follow?
📌 WHAT MUST CHANGE — AND WHAT YOU CAN DEMAND
This situation is not inevitable. It is a product of policy choices that can be reversed. Here is what structural resolution looks like:
✅ Full compliance with Section 109 of the PIA. NUPRC — the upstream regulator — must enforce the domestic supply obligation on all crude producers, not just NNPC. Every barrel exported while the Dangote Refinery runs on imported crude is a policy failure with a legal remedy.
✅ Transparency on crude-backed loan obligations. Nigerians deserve to know exactly how much of NNPC’s crude output is pre-committed to debt service arrangements — and when those arrangements expire. This is public money.
✅ Credible crude allocation to the refinery at scale. Raising NNPC’s monthly supply from 5 to 7 cargoes, when the refinery needs 19, is not a solution. It is a gesture. The Presidency’s own naira-for-crude initiative will remain symbolic until supply reaches commercially meaningful levels.
✅ Fix upstream production. All of this is compounded by the fact that Nigeria itself is underproducing. A budget target of 1.84 million barrels per day, against actual output of 1.46 to 1.58 million, means there are fewer barrels available to allocate in the first place. Pipeline security, theft prevention, and upstream investment must be urgent national priorities.
📌 THE BOTTOM LINE
Nigeria built — through private investment — the largest single-train refinery in the world.
It sits on our soil. It employs our people. It processes crude into fuel our citizens need.
And in May 2026, it will spend ₦2 trillion importing crude oil from international markets — because the system designed to supply it with Nigerian crude is not working.
That ₦2 trillion does not go to Nigerian farmers. It does not go to Nigerian workers. It does not go to FAAC. It does not repair a single federal road or pay a single teacher’s salary.
It goes to international crude traders — many of them operating out of Geneva, Singapore, and Houston — because Nigeria cannot organise itself to supply its own refinery with its own crude.
This is not a story about Dangote. It is not a story about NNPC.
It is a story about a country that keeps finding new ways to be poor in the middle of its own wealth. 🇳🇬
Olatilewa Oni, ACA
