Nigeria Braces for Fuel Scarcity as Dangote Refinery Supply Hits Critical Low

The Nigerian energy sector is facing a critical juncture as the House of Representatives Committee on Petroleum Resources (Downstream) warns of a systemic collapse in the domestic fuel supply chain. At the heart of the crisis is a significant feedstock deficit at the Dangote Refinery, the 650,000 barrel-per-day facility that was positioned as the cornerstone of Nigeria’s transition from a fuel importer to a self-sufficient energy producer. According to Committee Chairman Ikeagwuonu Ugochinyere, the refinery is currently receiving only five cargoes of crude oil, despite requiring a minimum of 15 to operate optimally and being entitled to 21 under existing frameworks. This 66% shortfall from the minimum operational threshold represents a direct threat to the availability of Premium Motor Spirit (PMS) across the federation.

This development exposes deep-seated inefficiencies in the implementation of the Petroleum Industry Act (PIA) 2021 and the Presidential Technical Committee’s 'Crude-for-Naira' initiative. The initiative was designed to eliminate the need for foreign exchange in domestic crude transactions, thereby stabilizing pump prices and reducing the influence of international middlemen. However, the committee’s findings suggest the opposite is occurring. Local refiners are reportedly paying a premium of over $18 per barrel to international trading intermediaries—a cost burden that was supposed to be eliminated by direct domestic supply mandates. These 'middleman' costs are being passed down the value chain, creating upward pressure on fuel prices that the government claims are not driven by deliberate policy, but by logistical and regulatory failure.

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This 66% shortfall from the minimum operational threshold represents a direct threat to the availability of Premium Motor Spirit (PMS) across the federation.

Beyond the volume of supply, the quality of crude being delivered has emerged as a secondary flashpoint. The committee has characterized recent deliveries to the Dangote Refinery as 'substandard,' arguing that a facility of such technological complexity requires high-grade crude typically sourced from the Niger Delta. The use of lower-quality feedstock not only reduces refining efficiency but can also lead to increased maintenance costs and potential damage to sensitive refining units. The demand for prioritization of Niger Delta crude for domestic use highlights a growing tension between the need to meet international export obligations and the urgent requirement to satisfy domestic energy demand.