Africa’s largest refinery has reported a notable increase in crude supply for March, but rising input costs and continued reliance on imports are putting pressure on operational margins.
According to Aliko Dangote, the refinery received a total of 10 cargoes of Nigerian crude oil in March, a significant improvement from about five cargoes recorded in previous months. He disclosed that six of the cargoes were supplied under naira denominated arrangements, while four were priced in dollars.
The development marks a temporary boost in domestic crude supply to the facility, which is operated by Dangote Refinery. However, the volume remains below the refinery’s full requirement, as the plant needs about 19 cargoes monthly to operate at optimal capacity.
Despite the increase, supply constraints persist. The refinery has continued to source additional crude from the United States and other African producers to bridge the gap between available domestic supply and operational needs.
Management had earlier indicated that crude supply from local producers has remained inconsistent, forcing the refinery to rely on international traders. This has introduced additional costs, including premiums, freight, and insurance, all of which have risen sharply in recent weeks.
Global oil market conditions have further compounded the challenge. Crude prices have surged amid geopolitical tensions in the Middle East, driving up feedstock costs for refiners worldwide. For Dangote Refinery, this has translated into higher production expenses and tighter margins.
Although the refinery has expanded its operations since commencing production in 2024 and now exports refined products beyond West Africa, the cost pressures associated with crude sourcing remain a key concern.
The March supply figures highlight a mixed outlook for the facility. While increased domestic allocations offer some relief, the continued dependence on imported crude and elevated global prices are limiting the refinery’s ability to fully optimise output and profitability.