Giant Dangote Refinery Unable to Shield Nigeria from Global Energy Price Shocks

Despite the 650,000 bpd Dangote refinery reaching full operation, Nigerians face a 65% spike in gasoline prices due to Middle East war shocks and crude import needs.

By: AXL Media

Published: Mar 30, 2026, 5:32 AM EDT

Source: Reuters

The Crude Supply Paradox

While Nigeria is Africa’s largest oil producer, the Dangote refinery is struggling to source domestic crude. This is due to the Nigerian National Petroleum Company Limited (NNPC) joint-venture model, where a significant portion of production (estimated at 400,000 bpd) is pre-committed to:

Oil-backed loans

Pre-export financing deals with banks and traders

Debt repayments to international oil majors

Consequently, the refinery can only source about five cargoes of local crude per month, far below the 13–15 cargoes required for full capacity. The shortfall must be met through imports at international prices, which have surged above $100 a barrel following the effective closure of the Strait of Hormuz.