The Chief Executive Officer of the Dangote Refinery, David Bird, has clarified that the facility purchases Nigerian crude oil at international benchmark prices despite the Federal Government’s crude-for-naira initiative.
Bird made the disclosure during a media briefing in Lagos on Monday, explaining that the refinery does not benefit from discounted crude and remains fully exposed to global market conditions.
According to him, the crude-for-naira framework does not translate into preferential pricing for the refinery, as Nigerian crude supplied to the plant is still sold at prevailing global benchmark rates.
“Even under the crude-for-naira arrangement, Nigerian crude is purchased at international benchmark prices, meaning the refinery does not receive discounted crude,” Bird said.
He noted that the refinery would continue to meet Nigeria’s fuel needs despite the volatility currently affecting international oil markets.
Bird also warned that countries heavily dependent on fuel imports are most vulnerable to the ongoing global oil market turbulence.
“Import-dependent countries are worst hit as the global oil crisis escalates,” he said, adding that crude prices have experienced sharp fluctuations in recent days.
“Global oil markets are experiencing extreme volatility, with crude prices rising from the mid-$60 range to nearly $120 per barrel within a week,” he added.
The refinery chief further explained that operational costs at the facility are largely influenced by global factors such as crude oil prices, shipping, insurance and financing.
He highlighted the sharp increase in logistics costs, particularly tanker freight rates.
“Freight costs have surged dramatically, with tanker costs rising from about $800,000 to roughly $3.5 million per shipment in the current market environment,” Bird said.
“The refinery is fully exposed to international commodity markets, including crude oil prices, freight rates, insurance and financing costs.”
Despite these pressures, Bird stated that the refinery continues to operate at full capacity.
He said the facility currently runs at its nameplate capacity of about 650,000 barrels per day, with the potential to increase production to around 700,000 barrels per day.
Industry observers say the scale of the refinery could significantly strengthen Nigeria’s energy security by reducing dependence on imported petroleum products and shielding the economy from global supply disruptions.
The refinery had earlier indicated its readiness to compete in Nigeria’s petroleum market under import-parity pricing, provided regulators ensure a level playing field for all operators.
Owned by African industrialist Aliko Dangote, the Dangote Refinery is regarded as one of the largest single-train refining facilities in the world and is expected to transform Nigeria’s downstream petroleum sector by supplying refined products domestically.
In 2024, the Federal Executive Council approved the naira-for-crude initiative aimed at supplying local refineries with crude in naira rather than dollars in order to stabilise fuel prices and the naira exchange rate.
In April 2025, the Federal Government of Nigeria reaffirmed its commitment to the policy, extending the framework to cover both crude supply and refined product sales.
