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Economist Group Faults Crude Supply Delay To Dangote … Says Its Risky To Nigeria’s Economy’
The Economist Intelligence Unit (EiU), the research and analysis division of the Economist Group, has warned that further delays in crude oil feedstock to the Dangote Petroleum Refinery and Petrochemicals could jeopardise Nigeria’s economic recovery, putting more pressure on the Naira, the local currency.
It noted that the Dangote Refinery, which began production in January, has encountered setbacks in petrol production due to a shortage of crude oil feedstock.
The $20 billion facility, it stated, has successfully exported various products, including fuel oil, naphtha, nitrogen fertilisers, gasoil, jet fuel, and diesel, but has been unable to ramp up petrol production due to challenges in sourcing adequate crude oil.
The delays are expected to have significant economic repercussions for Nigeria, and likely to worsen the already strained relationship between public finances and the management of the Naira.
Acknowledging that the government had previously scrapped the official petrol subsidy in June 2023, the report said the practice of unofficially subsidizing petrol continues, with substantial implications for the national budget.
It further noted that this has led to increased currency losses, contributing to a widening budget deficit that has become increasingly difficult to manage and could force the Central Bank of Nigeria to revert to stronger management of the currency.
“As the Federal Government unofficially subsidises petrol (the official subsidy was scrapped in June 2023), currency losses feed into a widening budget deficit that is becoming more challenging to finance.
“This provides extra incentive for the central bank to revert to stronger management of the currency, as we already expect, but the degree of market intervention could become heavier.
“Meanwhile, ongoing fuel imports would reduce the current-account surplus from the 1.9% of GDP that we currently project for 2025, potentially leading to lower foreign reserves and the return to a more rigid and unstable foreign-exchange system”, it said.
The delay in securing a reliable pipeline of affordable crude oil feedstock was attributed to low crude production due to oil theft and underinvestment, and using crude oil to repay outstanding loans.
“The refinery has encountered a range of problems, both practical and political in nature. The most publicly discussed issue is how the refinery can secure a reliable pipeline of crude oil feedstock at affordable prices.
“NNPC, the state oil firm, has not been able to provide enough volume. The government has promised to deliver 450,000 b/d of oil to the refinery through NNPC in a pilot scheme, sold in Naira, but the state oil company is not in a position to make this a reliable arrangement.
“Crude production in Nigeria is stubbornly low, as a result of oil theft and underinvestment. Output was 1.31m b/d in July, against an OPEC+ target of 1.38m b/d.
“NNPC receives a varying minority share of this and, moreover, a sizable quantity (about 90,000 b/d) is being committed as loan collateral”, it stated further.
Accordingly, it said, the situation has been worsened by International Oil Companies (IOCs) operating in Nigeria, which demand a premium of $3-$4 per barrel over the prices they receive elsewhere.
It noted that regulators are hesitant to enforce the Domestic Crude Supply Obligation (DCSO)—which requires IOCs to sell crude to local refineries—out of concern that such enforcement might lead to divestment.
The report emphasised that producing fuel locally would significantly benefit Nigeria’s fiscal position and currency, given that petroleum products account for 15% to 20% of the country’s goods import bill.
The Dangote refinery, hailed as a transformative development, is expected to resolve the paradox of Nigeria being a major crude oil producer yet still dependent on fuel imports.
With a capacity of 650,000 barrels per day (b/d), the refinery is expected to potentially eliminate the need for fuel imports and shield local fuel prices from exchange-rate fluctuations.
“The Dangote fuel refinery is potentially transformational for Nigeria, which has always been an oil exporter and fuel importer.
“This fact is often regarded as a failure and an embarrassment by politicians, businesses and the media alike, but the new refinery has the ability to change this”, it stated.
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The Managing Director, Nigerian Ports Authority (NPA), Dr. Abubakar Dantsoho, has said the management will continue to accompany its port infrastructure and equipment modernization drive with the development of the welfare of its personnel.
Dantsoho made the disclosure recently while responding to the commendation by the Maritime Workers Union (MWUN) and the senior Staff Association of Statutory Corporations and Government-Owned Companies (SSASGOC) on the clearing of the age-long problem of employee stagnation, when the union paid him a courtesy visit at the Authority’s headquarters in Lagos.
A Statement by NPA’s General Manager Corporate & Strategic Communications, Mr. Ikechukwu Onyemekara, quoted Dantsoho as saying, “our Port infrastructure and equipment modernization drive will go hand-in-hand with continuous staff welfare improvement”.
The NPA MD disclosed that human capital development constitutes the key strategy for creating and sustaining superior performance under his watch, adding that “talent development constitutes a critical success factor for the actualization of the big hairy audacious goals we have set for ourselves especially in the area of Port competitiveness.
“The only way we can meet and indeed exceed stakeholders’ expectations is to deepen the competencies of our human resources assets and boosting their morale.”
Speaking further, Dantsoho commended the Honourable Minister of Marine & Blue Economy, Adegboyega Oyetola, for approving the strategic proposal of the Dantsoho-led Management team that solved the over a decade-long problem of lack of promotion that had fuelled industrial disharmony.
“I must specially appreciate our amiable Minister for graciously approving the multi-pronged stratagem we deployed that cleared all outstanding cases of employee stagnation by conducting examinations in one fell swoop and instituted timelines to forestall a recurrence of such anomaly”, he sad.
Speaking on behalf of the joint maritime labour unions, the President of Senior Staff Association of Statutory Corporations & Government-Owned Companies (SSASCGOC), Comrade Bodunde stated, “In addition to clearance of the backlog of stagnated promotions, we also wish to express our appreciation for the increase in productivity bonuses, provision of end-of-year welfare packages for staff, and the revision of the Financial Guide to the Condition of Service, which now addresses our members’ concerns about inflationary pressures.”
Nkpemenyie Mcdominic, Lagos
National Secretary of the Association of Nigerian Licensed Customs Agents (ANLCA), Elder Olumide Fakanlu, has been elected Vice President of the Federation of ECOWAS Licensed Customs Brokers Association (FELCBA).
The election took place during the FELCBA Congress, held from Tuesday, June 17th to Thursday, June 19th, 2025, in Freetown, Sierra Leone.
Fakanlu’s emergence as Vice President marks a significant achievement for Nigeria within the regional customs brokerage community.
Apart from Fakanlu, Secretary of the Seme Chapter of ANLCA, Austin Nwosu, was also elected, securing the role of Secretary of Relations with Institutions.
The Nigerian delegation played an active role in the congress, with Michael Ebeatu nominated as a member of the electoral officer team, ensuring a fair and transparent election process.
The three-day congress concluded with delegates undertaking a visit to the Sierra Leone Port, offering insights into the host nation’s maritime operations, followed by a recreational trip to the Tokeh Beach.
The newly elected executives are expected to lead FELCBA in its efforts to harmonize customs brokerage practices, promote trade facilitation, and advocate for the interests of licensed customs brokers across the ECOWAS sub-region.
Nkpemenyie Mcdominic, Lagos
In a bid to enhance more enforcement in the nation’s Port, the Nigerian Shippers’ Council (NSC) has reaffirmed its commitment to stronger inter-agency collaboration with the Nigeria Police Force (NPF).
The Council said the collaboration is aimed at enhancing stronger enforcement, compliance and improve operational efficiency across Nigeria’s ports.
Executive Secretary/Chief Executive Officer of NSC, Dr. Pius Akutah, made this known during a visit to the Inspector-General of Police, Dr. Kayode Adeolu Egbetokun, at the Force Headquarters, Abuja.
The visit, which he said, focused on strengthening institutional synergy, comes in the wake of growing responsibilities for the NSC under the newly created Ministry of Marine and Blue Economy.
Akutah emphasized the critical role of security agencies in supporting port operations and ensuring regulatory compliance.
He called for the posting of police officers to assist the Council’s monitoring and enforcement teams at key port locations including Lagos, Warri, Onne, Port Harcourt, and Calabar.
“The posting will complement the activities of our revived task teams and enhance our ability to enforce standards across the maritime logistics chain”, he said.
Earlier, the Inspector-General of Police, Dr. Egbetokun, assured the Council of the Force’s readiness to continue supporting the growth of the maritime sector.
The IGP acknowledged that compliance enforcement is essential to the successful implementation of Nigeria’s Blue Economy objectives.
“The NSC and NPF are expected to deepen collaboration in the months ahead, with a shared focus on building a secure, efficient, and competitive port environment”, to the IGP emphasized.
Chinedu Wosu