Abdulrazaq Hamzat proposes immediate corrective measures
A leading energy policy analyst and Executive Director of the Foundation for Peace Professionals (PeacePro), Abdulrazaq Hamzat, has cautioned that Nigeria may forfeit a once-in-a-generation opportunity in the global energy market due to federal policy lapses, regulatory bottlenecks, and unreliable crude supply affecting the 650,000 barrels-per-day Dangote Petroleum Refinery.
In a statement issued on Friday, Hamzat referenced data from energy intelligence firm Kpler, which indicates that refinery closures in Europe and North America have permanently eliminated between 800,000 and 900,000 barrels per day of refining capacity. This structural contraction has tightened global fuel markets and increased dependence on late-cycle mega refineries, notably Dangote’s facility and Mexico’s Dos Bocas refinery.
According to Hamzat, Nigeria’s challenge is not rooted in infrastructure capacity but in governance execution. He argued that despite commissioning a refinery with the scale to influence regional and international fuel markets at a time when advanced economies are exiting refining, weak policy implementation, regulatory inconsistency, and erratic crude supply have prevented optimal performance.
Currently, the Dangote refinery is operating at approximately 60–65 percent capacity, largely due to inconsistent crude deliveries from the Nigerian National Petroleum Company Limited (NNPC). Although the Federal Executive Council approved a naira-for-crude framework in 2024 to prioritise domestic refining, Hamzat noted that enforcement has been ineffective. He further observed that compliance with the Domestic Crude Supply Obligation under the Petroleum Industry Act remains uneven, while the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has yet to publish verifiable data on crude volumes supplied to the refinery.
Hamzat also drew attention to mechanical challenges at the Residue Fluid Catalytic Cracking (RFCC) unit, compounded by variations in crude quality and lingering regulatory uncertainty around pricing, logistics, and export approvals overseen by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Kpler estimates that once fully operational, the Dangote refinery could produce up to 300,000 barrels per day of gasoline, 150,000 barrels per day of gasoil, and 140,000 barrels per day of jet fuel—output levels sufficient to ease supply tightness in the Atlantic Basin while significantly enhancing Nigeria’s export earnings.
The ongoing RFCC corrective shutdown has been described as a critical inflection point. A successful restart, Kpler suggests, could elevate the refinery from limited participation to a structurally influential player in global fuel markets by mid-2026.
To unlock this potential, Hamzat proposed seven priority actions for the Federal Government: ensuring uninterrupted crude supply through strict enforcement of domestic supply obligations; establishing an inter-agency task force comprising NNPC, NUPRC, NMDPRA, and Dangote management to harmonise operations; accelerating regulatory approvals for pricing, exports, and product evacuation; expediting technical repairs with international expertise where required; instituting transparent, independently verified performance reporting; actively supporting export access to Atlantic Basin markets; and resolving policy inconsistencies across petroleum sector institutions.
In conclusion, Hamzat warned that global market dynamics have shifted decisively. Without swift internal reforms, he argued, the Dangote refinery risks operating without strategic impact, leaving Nigeria trapped as a fuel importer in an increasingly seller-driven global market.
