Nigeria's Dangote Oil Refinery has commenced the processing of gasoline after overcoming delays caused by recent crude supply shortages. This significant development was confirmed by an executive on Monday.
The $20billion refinery, constructed by Africa's wealthiest individual, Aliko Dangote, began its operations in January 2024. Initially producing naphtha and jet fuel, the facility is now set to roll out petrol, aiming to reduce Nigeria's heavy reliance on imported oil products despite being a major oil producer.
Devakumar Edwin, Vice President at Dangote Industries Limited, stated, "We are testing the product (gasoline) and subsequently it will start flowing into the product tanks." He added that while the exact date for the gasoline to hit the local market remains unspecified, the Nigerian National Petroleum Company (NNPC) Limited will be the exclusive buyer of the refinery's gasoline. "If no one is buying it, we will export it as we have been exporting our aviation jet fuel and diesel," Edwin noted.
This move is expected to alleviate the persistent fuel shortages that have plagued Nigeria since July. The NNPC, which has been grappling with a $6 billion debt to oil traders, has struggled to meet local demand, leading to a 45% surge in fuel prices from the official price of 617 naira ($0.39) per liter announced after the removal of subsidies last year.
The Dangote Refinery, with a capacity of 650,000 barrels per day, stands as Africa's largest refinery. It is poised to play a crucial role in stabilizing Nigeria’s fuel supply, significantly lowering importation and logistics costs, and allowing local marketers to purchase petrol from NNPC at a reduced price.
In line with the Petroleum Industry Act (PIA), NNPC Ltd. remains dedicated to its role as the supplier of last resort, ensuring national energy security. "We are actively collaborating with relevant government agencies and other stakeholders to maintain a consistent supply of petroleum products nationwide," NNPC stated.
The Federal Executive Council has also approved the sale of crude oil to the Dangote refinery in local currency, on the condition that the refinery will sell processed petrol to the country in the same currency. These developments are anticipated to contribute to a lasting solution to Nigeria’s ongoing fuel scarcity.
Comments