Dangote Refinery: OPEC Reports Significant Reduction of Petrol Exportation to Nigeria

The Organisation of the Petroleum Exporting Countries (OPEC) reports that the Dangote Petroleum Refinery has significantly decreased Nigeria’s reliance on imported refined petroleum products.

In its Monthly Oil Market Report published on January 15, 2025, OPEC notes that the refinery’s production has led to a surplus of gasoline in international markets, necessitating new distribution strategies.

“Continued gasoline production in Nigeria, a country that has relied heavily on imports to meet its domestic fuel needs in the past, will most likely continue to free up gasoline volumes in international markets,” the report states.

Despite these advancements, the refinery has encountered operational challenges. According to S&P Global, the facility is currently operating at approximately 50% capacity, with key units such as the Residual Fluid Catalytic Cracker (RFCC) experiencing instability.

Additionally, the Financial Times reports that Aliko Dangote is seeking substantial funding to secure consistent crude oil supplies for the refinery. The facility requires around $2 billion every 90 days to maintain operations at 300,000 barrels per day.

The federal government Nigeria has also taken steps to deregulate the oil sector as it has ended the exclusive buying rights of its state oil firm, NNPC Ltd, from the Dangote Oil Refinery, allowing local fuel traders to purchase petrol directly from the refinery.

While the Dangote Refinery’s contributions are poised to enhance Nigeria’s energy independence, experts caution that it is not a standalone solution to the nation’s fuel supply and pricing issues. Analysts suggest that additional reforms and infrastructure developments are necessary to fully address these challenges.

Fuel queues are commonplace in the country. Prices of petrol have risen fivefold since the removal of subsidy in May 2023 by President Bola Tinubu, from around ₦200/litre to around ₦1000/litre, compounding the woes of the citizens who power their vehicles, and generating sets with petrol, no thanks to decades-long epileptic electricity supply.

In December 2023, Aliko Dangote, Africa’s leading industrialist, commenced operations at his $20bn facility sited in Lagos with 350,000 barrels a day. The refinery, which was initially bogged by regulatory battles, hopes to achieve its full capacity of 650,000 barrels per day by the end of the year.