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Nigeria: Dangote refinery cuts crude imports after July production slowdown

Nigeria: Dangote refinery cuts crude imports after July production slowdown

Nigeria’s Dangote Petroleum Refinery sharply reduced its crude oil imports in August after a slowdown in operations in July left the facility with high inventories, according to industry data.

The 700,000-barrel-per-day refinery imported an average of about 499,000 barrels of crude per day in August, its lowest level in five months, as the company drew on stocks accumulated during the previous month.

The reduction follows operational disruptions in July, when maintenance work linked to the refinery’s flue gas steam generator constrained the plant’s crude distillation unit. Kpler estimated that the crude distillation unit operated at roughly 50% of capacity from July 10, reducing crude processing to around 350,000-400,000 barrels per day during parts of the month.

Nigeria’s Midstream and Downstream Petroleum Regulatory Authority reported average utilisation of about 71% for Dangote in July, equivalent to roughly 497,000 barrels per day. The refinery’s crude receipts, however, were higher, creating additional stocks that reduced the need for fresh imports in August.

The impact of the July slowdown was also visible in refined-product output. Dangote’s daily petrol production fell to 25.9 million litres in July from 39.1 million litres in June, while aviation fuel output stood at 15.6 million litres per day. At the end of July, the refinery held about 446.1 million litres of petrol, 162.3 million litres of diesel and 217.4 million litres of aviation fuel in stock.

The August reduction in crude purchases does not necessarily point to a fresh deterioration in refinery operations. Rather, the high inventory position has allowed Dangote to reduce new cargo purchases while using crude already in storage.

The refinery is also facing broader challenges in securing competitively priced crude. Nigeria has been seeking reforms to its domestic crude supply system, including proposals to allow oil producers to deliver crude directly to nearby refineries and to address pricing and logistical constraints.

Dangote has increasingly diversified its crude sources, including imports from the United States, Libya and other producers, as it seeks to maintain high operating rates. Reuters reported in August that roughly 30% to 40% of the refinery’s crude could come from imports, highlighting the importance of international supply to its operations.

With repairs completed and operations recovering, analysts expect crude purchases to increase again in September. MoneyCentral reported that Dangote had already contracted around 20 million barrels for September delivery, including Nigerian crude and international grades.

The development highlights the challenge facing Africa’s largest refinery as it moves toward sustained high utilisation: maintaining production will depend not only on the plant’s technical performance, but also on securing sufficient crude at competitive prices.

For Nigeria, the performance of the Dangote refinery remains strategically important as the country seeks to reduce its dependence on imported refined petroleum products and build a stronger domestic refining industry.