NNPC Shifts to Local Refining, Ends Petroleum Imports with Focus on Dangote Refinery
The Nigerian National Petroleum Company (NNPC) Limited has officially ended its importation of petroleum products, marking a significant shift toward promoting local refining capacity. In line with this new strategy, NNPC has expressed its commitment to purchasing petroleum products from domestic refineries, including the Dangote Refinery.
Mele Kyari, the Group Chief Executive Officer of NNPC, made this announcement during his address at the Nigerian Association of Petroleum Explorationists’ (NAPE) conference held in Lagos. Kyari also took the opportunity to dismiss rumors suggesting that NNPC had been hindering the operations of Dangote Refinery by refusing to engage in crude oil transactions in naira. He emphasized that the mode of payment, whether in naira or dollars, was of little consequence to the company, underscoring that NNPC’s focus was on ensuring the steady supply of crude oil to local refineries.
This strategic shift comes shortly after President Bola Tinubu’s remarks about the country’s fuel import costs, which he noted amounted to approximately N2 trillion monthly. In response to this issue, the President proposed that transitioning to compressed natural gas (CNG) could potentially help reduce these expenses and redirect resources into other critical sectors of the economy, such as infrastructure and healthcare.
Despite being one of the world’s largest oil producers, Nigeria has been heavily reliant on fuel imports due to a limited refining capacity. Kyari’s statements reflect a long-overdue pivot towards reducing Nigeria’s dependence on imported refined petroleum products, which has been a major drain on foreign exchange reserves and a contributing factor to inflationary pressures in the country.
The move to prioritize domestic refining is seen as a crucial step in strengthening Nigeria’s energy security and economic resilience. Kyari highlighted that this shift will not only reduce reliance on foreign currency but will also help alleviate some of the inflationary pressures associated with the high cost of imported fuel. By focusing on local refineries such as Dangote’s, the NNPC hopes to promote industrialization and job creation within the energy sector.
Kyari also noted the urgency of addressing the country’s significant energy deficit, with over 50 percent of the population lacking access to electricity and 70 percent lacking access to clean cooking fuel. He reaffirmed that NNPC’s mandate is not just about crude oil production, but also ensuring that domestic energy needs are met. As part of this broader mandate, the company recently settled a $2.4 billion cash-call debt to international oil companies, a major financial hurdle that had previously hindered the full potential of Nigeria’s oil and gas sector.
NNPC’s decision to end petroleum imports and focus on domestic refining is a strategic move aimed at strengthening the local economy, ensuring energy security, and reducing foreign exchange dependence. This initiative aligns with the government’s broader goals of economic diversification and self-sufficiency in critical sectors.
