NNPC ceases fuel imports, off-takes from Dangote Refinery amid ongoing energy and economic challenges

The Nigerian National Petroleum Company (NNPC) has ceased importing refined petroleum products and is now sourcing fuel solely from domestic refineries, including the Dangote Refinery. This shift comes amid broader energy and economic reforms, including efforts to improve energy security and reduce Nigeria’s reliance on costly fuel imports.

The Nigerian National Petroleum Company Limited (NNPC) has announced that it will no longer import refined petroleum products, instead opting to off-take fuel exclusively from local refineries, including the Dangote Petroleum Refinery.

This shift was disclosed by NNPC’s Group Chief Executive Officer (GCEO), Mele Kyari, at the Nigerian Association of Petroleum Explorationists (NAPE) conference in Lagos.

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This significant development comes amid an ongoing conversation about Nigeria’s energy and economic challenges.

Despite being an oil-producing country, Nigeria has long relied on imported fuel due to a lack of sufficient refining capacity.

This situation has resulted in the country spending an average of N2tn monthly on fuel imports, according to President Bola Tinubu.

The President’s administration has launched efforts to reduce these costs, including introducing compressed natural gas (CNG) to replace some of the fuel imports, potentially saving Nigeria over N2tn each month.

Kyari emphasized that the NNPC’s decision to focus on sourcing fuel from domestic refineries, such as Dangote’s, is a business-driven move aimed at securing long-term fuel supply in a changing global energy market.

He debunked claims that NNPC was sabotaging domestic refineries, stating that it has always been in the company’s best interest to supply crude oil to local refineries, ensuring stability in the local market.

Kyari also addressed concerns about the high cost of domestic refining, particularly with regard to Nigerian crude, which he referred to as “Lamborghini crude.”

This term highlights the premium nature of Nigerian crude oil, which, according to Kyari, often requires blending with cheaper crude to reduce costs at global refineries.

He stressed that while Nigeria should aim to refine its crude domestically, the price of such high-quality fuel could be a barrier to widespread consumption, especially for lower-cost vehicles and industries.

On the matter of fuel prices, Kyari noted that if Nigeria were to source all its fuel domestically, the cost would likely increase due to the quality of Nigerian crude, but the government is working to address pricing issues.

He also confirmed that the NNPC is working closely with the government to manage the challenges related to fuel pricing and ensure sustainable, affordable energy in the country.

Furthermore, Kyari revealed that NNPC has resolved its longstanding $2.4bn cash-call debt owed to international oil companies (IOCs).

This achievement has allowed the company to focus more on its core activities, such as oil production and ensuring domestic fuel availability, without the financial distraction caused by the subsidy burden.

Kyari expressed confidence that removing the subsidy would lead to more efficient energy use in Nigeria, despite the short-term challenges it may present.

Looking to the future, Kyari also highlighted NNPC’s commitment to diversifying Nigeria’s energy mix.

By the first quarter of 2025, the company aims to have 12 compressed natural gas (CNG) mother stations operational, which will help provide cheaper, cleaner fuel and ease the burden of reliance on imported petrol and diesel.

Despite these strides, Kyari acknowledged that Nigeria’s energy security remains a significant challenge.

Over 50% of the population still lacks access to electricity, and 70% do not have access to clean, affordable fuel. Addressing these issues is at the heart of NNPC’s strategy for ensuring long-term energy security and sustainability for Nigeria.