The Dangote Petroleum Refinery, with a capacity of 650,000 barrels per day, is leveraging cost-effective oil imports from the United States to fuel about a third of its operations as it gears up for production.
According to a report by Bloomberg, the refinery has been dispatching products in recent weeks while preparing two units for gasoline production, a move expected to revolutionize the fuel market in Nigeria and the surrounding region.
Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at Wood Mackenzie, remarked, “Dangote is poised to impact Atlantic Basin gasoline markets significantly this summer and beyond. When the RFCC unit comes online, it will greatly influence the West African gasoline supply balance.”
The refinery, currently operating at approximately 300,000 barrels per day, is shipping jet fuel, gasoil, and naphtha as it ramps up to produce a full range of products. The gasoline-focused units are anticipated to commence operations this summer, with some analysts predicting the RFCC unit to be operational by the year’s end.
Dangote Industries had earlier announced plans to commence gasoline deliveries in May, a move welcomed by the downstream oil sector. In a statement, the refinery disclosed a reduction in diesel prices from N1,200/litre to N1,000/litre, signaling its commitment to positively impact the economy.
Bloomberg reported that a significant portion of the oil supplied to the refinery comprises US-grade WTI Midland, a trend likely to continue if foreign oil remains more cost-effective than local supplies. However, Nigeria’s recent regulations requiring oil producers to sell crude to domestic refineries, coupled with the option to purchase crude using the local currency, could potentially alter this dynamic.
