Nigeria's $20 billion Dangote refinery is poised to reach its maximum refining capacity of 650,000 barrels per day (bpd) by June this year, according to officials at the facility. Currently, the refinery is operating at 500,000 bpd, but plans are underway to ramp up production to meet its originally intended capacity.

The refinery's ability to reach its maximum capacity has been hindered by local crude deficits, which have forced the facility to rely on imported crude oil. To address this issue, the refinery has announced plans to import crude from outside Nigeria, which is expected to bridge the supply gap and enable the facility to reach its full production potential.

According to sources, the Nigerian National Petroleum Corporation (NNPC) currently distributes between 350,000 bpd to 450,000 bpd of crude to the Dangote refinery, which is insufficient to meet the facility's production needs. As a result, the refinery has been forced to seek alternative sources of crude oil, including imports from countries such as Brazil and the United States.

The Dangote refinery's struggles to access locally produced crude oil have been exacerbated by a dispute with the NNPC, which has hindered local production of premium motor spirits (petrol). The refinery has accused the NNPC of selling crude oil at market price in US dollars, rather than naira, or claiming that it is unavailable, thereby limiting the refinery's access to local crude.

However, the federal government's initiative to sell crude oil to refineries in the local currency, the naira, is expected to alleviate some of these challenges. The naira-to-crude program, which commenced on October 1, 2024, allows refineries to purchase crude oil in naira, in exchange for delivering petrol and diesel of similar value to the domestic market, also in naira.

If the Dangote refinery is able to reach its maximum capacity of 650,000 bpd, it will be a significant milestone for Nigeria's oil industry, which has struggled with inadequate refining capacity and reliance on imported fuel products. The refinery's increased production is expected to have a positive impact on the local economy, reducing the country's reliance on imported fuel and creating jobs in the oil and gas sector.

The Dangote refinery's progress is also expected to have broader implications for the African oil industry, as Nigeria is the continent's largest oil producer. The refinery's increased production capacity is likely to have a ripple effect on regional energy markets, potentially reducing the cost of fuel products and increasing energy security in the region.

As the Dangote refinery prepares to reach its maximum capacity, industry watchers will be closely monitoring its progress, particularly in light of the challenges it has faced in accessing locally produced crude oil. However, with the federal government's support and the refinery's plans to import crude oil, it appears that the facility is on track to meet its production targets and make a significant contribution to Nigeria's oil industry.