Business
CRUDE BETRAYAL: Dangote Refinery Pays $18/Barrel Premium as Nigeria Leaks Petrodollars to International Traders — CEO Sounds Alarm Over Allocation Failures
CRUDE BETRAYAL: Dangote Refinery Pays $18/Barrel Premium as Nigeria Leaks Petrodollars to International Traders — CEO Sounds Alarm Over Allocation Failures
By Raymond Gold, Co-Publisher and Research Reporter, Waterways News
Africa’s largest oil refinery is being forced to buy Nigerian crude on international markets at a premium of more than $18 per barrel — a direct consequence of chronic failures in domestic crude allocation that are costing Nigeria hundreds of millions of dollars and keeping fuel prices high for ordinary consumers.
David Bird, Chief Executive of the Dangote Petroleum Refinery, made the disclosure in an interview with ARISE News, revealing that the 650,000-barrel-per-day facility — large enough to meet Nigeria’s entire domestic fuel demand — is currently receiving only five crude cargoes per month under a government-backed supply arrangement, against a pre-agreed contractual volume of 13 to 15 cargoes. “That’s an under performance against that pre-agreed volume contract,” Bird said.
“We’re now paying over $18 per barrel premium for those same Nigerian crude grades. That value is money that Nigeria is leaking to the international trading community.”
A Programme Undermined by Inconsistency
The shortfall strikes at the heart of Nigeria’s Crude-for-Naira programme — a mechanism designed to stabilize the naira by enabling domestic refiners to pay for locally produced crude in local currency rather than dollars. Bird was careful to clarify that the arrangement involves no subsidy or discount; crude is priced at full international benchmark levels. The problem, he stressed, is that the programme’s potential has been badly undermined by inconsistent delivery.
Currently, only 30 to 35 percent of the refinery’s crude requirements are being met through the Crude-for-Naira arrangement, with a further 30 to 40 percent sourced from international markets. While Bird described the facility as a merchant refinery with the flexibility to procure globally, that flexibility carries a cost that ultimately passes through to Nigerian consumers already struggling with elevated pump prices.
Compounding the volume shortfall is a grades mismatch. Bird said the refinery regularly submits detailed crude grade preferences aligned to its specific processing configuration — and routinely fails to receive them.
“Our hardware is designed around a certain crude slate,” he said. “Not only do we not get the full allocation, very often we don’t get the grades that we are highlighting as our preferences.”
A Policy Failure, Not Just a Market Problem
Bird’s remarks amount to a pointed indictment of Nigeria’s crude allocation system, long criticized for opacity, inefficiency and susceptibility to abuse. Nigeria, Africa’s largest oil producer, has battled crude theft, pipeline vandalism and chronic production under-performance relative to its OPEC quota — constraints that have periodically squeezed domestic supply volumes.
On pricing, Bird was candid about the limits of what the refinery can control. All major cost inputs — crude, freight and insurance — are exposed to geopolitical volatility. Referencing current global energy supply chain tensions, he cautioned that even a resolution to ongoing conflicts would leave disruption reverberating through supply chains for months to come.
“This is a cost-of-living crisis,” Bird said. “Every facet of the modern economy is impacted by energy.”
Reserves, Reform and an IPO
Looking ahead, Bird called on Nigerian authorities to adopt a broader view of the operating environment — one that addresses not only crude pricing but the overall cost of doing business in the country. He also advocated for the development of strategic petroleum reserves, warning that the COVID-19 pandemic had exposed dangerous vulnerabilities in global supply chains that neither governments nor industry had fully addressed.
On a more optimistic note, Bird confirmed the refinery is advancing plans for a public listing, positioning it as a wealth-building opportunity for ordinary Nigerians.
“This is the people’s IPO,” he said. “We want it to be one of the most widely subscribed IPOs in the world.”
For now, the more pressing challenge remains securing the crude Nigeria already produces — at prices that do not hand a windfall to international traders. As Bird put it, the problem is as much a policy failure as a market one.
“Our job is to be cost-effective, disciplined and resilient through the cycle,” he said. “What goes up always comes down.”
Nigeria Watch
The Dangote Refinery’s crude supply crisis is a microcosm of a broader dysfunction in Nigeria’s upstream-to-downstream value chain. Every barrel the refinery is forced to buy on international markets at an $18 premium is a barrel’s worth of foreign exchange leaving the country — a direct contradiction of the Crude-for-Naira programme’s naira-stabilization objectives. For Nigerian maritime stakeholders, the freight dimension is equally significant: imported crude cargoes mean more tanker calls, higher bunker costs, and greater exposure to the very global shipping disruptions — including the ongoing Hormuz crisis — that are already pushing freight and insurance rates upward. NIMASA, the NPA and the Federal Ministry of Marine and Blue Economy should be tracking this closely. Securing reliable domestic crude allocation for Dangote is not merely a refining industry issue — it is a shipping, logistics and blue economy imperative.
AS SAUDI TANKERS DITCH RED SEA FOR AFRICA ROUTE, NIGERIA IS MISSING FROM THE MAP
By Oghenewoke Osaweren | Waterways News
Six Saudi supertankers turned their backs on the Bab el-Mandeb chokepoint this week, setting a course around the entire African continent rather than risk the Houthi-threatened waters of the Red Sea. The vessels are heading toward Gibraltar and South Africa’s Durban and Algoa Bay ports as waypoints on their unusual cross-continental journey. All six had loaded no cargo and turned away from Bab el-Mandeb after Houthi attacks on Saudi-linked shipping pushed Riyadh to reroute crude exports through Egypt instead.
It is a story that has run in Bloomberg, Reuters and half a dozen shipping trade outlets already, told mostly from the bridge of the tanker and the trading desks of Riyadh and London. What almost none of them ask is the question that matters most from Lagos: as six more supertankers join a growing armada now circling Africa’s coastline every month, why is Nigeria still standing outside looking in?
A DETOUR THAT IS BECOMING THE ROUTE
This is no longer a short-term scramble. Cape Town alone has seen a 112 percent surge in vessel traffic as the southern route hardens from an emergency workaround into what analysts now call a structural feature of global shipping. A single VLCC or large container ship now absorbs between $400,000 and $800,000 in extra bunker costs per voyage just to make the longer trip. That is money looking for somewhere on the African coast to land.
South Africa’s own commentators have begun asking why the country is watching billions of dollars in shipping activity sail past its shores while the fuel, repair, warehousing and crew-change business goes elsewhere. Namibia is expanding Walvis Bay, Kenya is pushing Lamu Port, and even Togo has moved to turn the Port of Lomé into a bunkering and transshipment hub, while South Africa’s own bunker volumes fell from roughly 130,000 tonnes a month to about 80,000. Mauritius nearly doubled its bunker fuel sales at Port Louis to a record 929,043 metric tons in 2024, up from 509,837 tons the year before, as regulatory friction pushed business away from South Africa.
Nigeria appears nowhere in that list of contenders despite being the continent’s largest crude producer, sitting directly along the Atlantic leg of the same route these tankers must sail to reach Gibraltar and the Mediterranean.
THE COAST NIGERIA IS NOT SELLING
Every vessel diverted around Africa eventually has to pass along West Africa’s flank on its way north. That ought to be an opportunity for Nigerian ports, bunkering, ship supply, crew changes and repair contracts to have the same economic multiplier effect that analysts say is now reshaping port economies from Cape Town to Lomé. Instead, the conversation happening in Abuja, at NIMASA, and inside Nigeria’s port authorities has been almost entirely absent from the continental race to capture this windfall.
The silence is not free. The Gulf of Guinea already accounted for 92 percent of all crew kidnappings worldwide in 2025, with the number of crew taken hostage rising from 12 in 2024 to 23. Niger Delta-based pirate networks have shown growing operational sophistication and a readiness to use violence to secure ransom, with oil tankers and offshore support vessels remaining their primary targets. As more traffic funnels past Nigerian waters on the long haul to Europe, that threat does not shrink — it grows, and it grows against a security posture that has not visibly scaled to match it.
GOVERNANCE, NOT GEOGRAPHY, IS THE GAP
Industry voices in South Africa have already diagnosed their own version of this failure in stark terms, is insisting the issue is not geography but execution: infrastructure, regulation, and the will to compete for business that is, quite literally, passing offshore. Where shipping lines seek alternatives to traditional routes, that opens opportunities for local ports, logistics operators, ship repair facilities, bunkering providers and maritime security operators to grow.
That same test now sits in front of Nigeria. The Saudi tankers steaming past this week are not a one-off curiosity. They are six more data points in a shift that has already rewritten shipping economics for the whole continent. The trip round Africa adds roughly ten days and demands more fuel and crew time, driving up costs for every operator making the journey. Every one of those extra days is revenue waiting for a coastline willing to organize itself to collect it, a test Nigeria’s maritime institutions have yet to show up for.
Blue Economy
Lekki Port Lands HMM-ONE Alliance Service, Boosts Nigeria’s Direct Global Shipping Links
Lekki Port Lands HMM-ONE Alliance Service, Boosts Nigeria’s Direct Global Shipping Links
By Raymond Gold | Waterways News
Lekki Deep Sea Port has notched another milestone in its bid to establish itself as West Africa’s premier maritime gateway, welcoming the maiden call of a new joint container service operated by Hyundai Merchant Marine (HMM) and Ocean Network Express (ONE).
The port received the inaugural vessel under the newly launched Mediterranean West Africa Service (MA2) on Saturday, July 25, 2026, adding another direct link between the Nigerian deep seaport and major hubs across Europe and West Africa.
Port management says the new rotation should translate into more frequent direct vessel calls, quicker cargo evacuation, and a stronger competitive position for Nigeria in regional and international trade.
Lekki Port Managing Director Wang Qiang called the maiden call a strong vote of confidence in the facility’s infrastructure and operational efficiency, noting that international carriers’ willingness to route through Lekki reflects growing trust in the port’s capacity to handle major liner traffic.
He said the addition to the MA2 rotation opens up new trade opportunities for shippers and reinforces Lekki’s ambition of becoming West Africa’s leading logistics gateway.
Industry watchers expect the service to give Nigerian importers and exporters more scheduling flexibility and more predictable transit times, while easing some of the bottlenecks that have historically dogged cargo movement between Nigeria and European markets. Manufacturers and agricultural exporters in particular stand to benefit from steadier access to overseas buyers through a regular liner rotation.
Since opening for commercial business, Lekki Deep Sea Port has drawn a growing roster of global shipping lines, banking on its deep draught, modern handling equipment, and faster turnaround times to differentiate itself from Nigeria’s older, more congested terminals.
Nigeria Watch
The HMM-ONE call is worth reading against the backdrop of what Lekki was built to fix. For decades, Nigerian cargo bound for Europe routed through transshipment hubs like Tema, Cotonou, or even ports further afield, adding cost, time, and risk that Apapa and Tin Can Island’s chronic gridlock only made worse. A direct alliance service naming Lekki in its West Africa rotation is a signal that at least one deep seaport in the country can compete on draught, turnaround, and predictability, all terms that matter to carriers.
But one alliance call does not settle the larger argument. Nigeria’s port sector still carries structural drag, the NPA’s stalled $1 billion modernisation ambitions for the older Lagos terminals, unresolved concession renewal anxieties among existing operators, and an Electronic Call-Up System that has yet to fully tame the Apapa corridor. If Lekki’s gains simply widen the gap with legacy terminals rather than pulling the whole system up, the win will be lopsided, one gateway thriving while NPA-controlled ports continue to bleed time and money to congestion.
There is a policy question the Federal Ministry of Marine and Blue Economy and NIMASA need to keep asking. Is Nigeria converting improved shipping access into real export growth, or just cheaper imports?
A liner service is only as valuable as what moves through it in both directions. Unless agricultural and manufactured exporters actually scale up shipments through Lekki, the “improved global connectivity” story risks being another headline that doesn’t reach the balance of trade.
Business
Lagos Ports Choke Point: NPA Logs 16 Ships Waiting to Berth, Braces for 28 More Arrivals in Five Days
Lagos Ports Choke Point: NPA Logs 16 Ships Waiting to Berth, Braces for 28 More Arrivals in Five Days
By Raymond Gold | Waterways News
Nigeria’s Lagos ports are staring down another week of heavy vessel traffic, as the Nigerian Ports Authority (NPA) confirmed that 16 ships are currently anchored off Lekki Deep Sea Port, Tin Can Island Port and Apapa Port awaiting berthing space, with 28 additional vessels expected to arrive between July 22 and July 26. The disclosure was contained in the NPA’s daily Shipping Position released on Wednesday in Lagos, a routine bulletin that nonetheless offers a revealing snapshot of just how dependent Nigeria’s busiest port complex remains on imported fuel, food and industrial raw materials.
According to the authority, the vessels currently waiting to discharge are carrying a mixed manifest of petrol, aviation fuel and diesel alongside bulk wheat, bulk fertiliser, bulk urea and bulk sugar, plus general cargo. It is a cargo profile that has become familiar at Nigerian ports: fuel and food, arriving in near-equal measure, queued up behind one another for scarce berthing windows.
The pressure is not expected to ease soon. The NPA said the 28 vessels billed to arrive over the coming days are loaded with bulk wheat, containerised cargo, fresh fish, petrol, trucks, fuel oil, diesel, crude oil, aviation fuel and general cargo, a schedule that, added to the ships already waiting, will keep berths at Apapa, Tin Can and Lekki under sustained strain through the weekend.
Meanwhile, port operations have not stalled. The authority reported that 21 ships are actively discharging cargo across the three terminals, offloading containers, petrol, aviation fuel, crude oil, bulk fertiliser, bulk gypsum, gas, diesel, bulk wheat, bulk sugar, bulk urea, fresh fish, general cargo and base oil, evidence that, congestion notwithstanding, throughput at Nigeria’s premier gateway ports continues at pace.
Perhaps the most striking element of the report is what it says about Nigeria’s fuel import dependence. Despite the ramp-up in domestic refining capacity since the Dangote Petroleum Refinery came on stream, a significant share of the vessels at anchor or inbound are still laden with premium motor spirit, automotive gas oil, aviation fuel and fuel oil. It is a reminder that local refining, however much ground it has gained, has not yet closed the gap between what Nigeria produces and what it consumes at the pump.
Taken together, the numbers point to a port system running close to capacity, fuel tankers, bulk carriers and container ships jostling for a limited number of berths, even as crude oil exports and refined product imports continue to move in parallel through the same gateway.
Nigeria Watch
For a country whose ports serve as the primary conduit for both its oil export earnings and its fuel security, a queue of 16 ships waiting to berth, with 28 more converging on Lagos within days, is not merely a logistics footnote. It is a live pressure test of infrastructure that has long struggled to keep pace with cargo volumes at Apapa and Tin Can Island in particular, both of which remain hemmed in by shallow drafts, ageing quay aprons and access-road gridlock that regularly spills into the Apapa-Oshodi corridor.
The persistence of large petrol, diesel and aviation fuel cargoes on the manifest, well over a year after Dangote Refinery began supplying the domestic market, is the detail industry watchers should sit with longest. It suggests that the substitution of imported refined products with local output remains partial, and that Nigeria’s downstream fuel security still rests substantially on seaborne imports arriving through Lagos. That dependence carries fresh weight given the unfolding Strait of Hormuz crisis, where rising war risk insurance premiums, seafarer deployment restrictions from source countries like India and the Philippines, and tighter tanker availability are already pushing up freight costs on routes serving West Africa. Any prolongation of that crisis would be felt first at berths exactly like these, where PMS and AGO cargoes queue for discharge.
There is also a capacity argument buried in this traffic report that reinforces the case for Lekki Deep Sea Port to absorb a larger share of Lagos-bound cargo, easing pressure on the constrained, decades-old infrastructure at Apapa and Tin Can. With concession renewal talks at both older terminals still unresolved, and the Nigerian Ports Authority yet to deliver the kind of berth-productivity gains that would meaningfully cut turnaround times, congestion of this scale is likely to remain a recurring feature of the Lagos shipping position rather than an isolated week’s anomaly. For Nigerian shippers, freight forwarders and importers already contending with elevated global freight rates, that is a cost that ultimately lands on the consumer.
Source: NPA
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