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Dangote refinery starts petrol production, raises hope of addressing Nigeria's fuel crises

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Petrol production begins at the Dangote Refinery, Africa’s largest, located on the outskirts of Lagos.
Dangote Refinery has commenced petrol production for the first time in 28 years.
  • Dangote Refinery Plc has started petrol production, marking a significant milestone for Africa's largest refinery 
  • The $20 billion facility has a daily capacity of 650,000 barrels and is expected to reduce Nigeria’s dependence on imported oil products
  • The Nigerian National Petroleum Corporation (NNPC) will be the sole buyer of the gasoline produced by Dangote Refinery, according to a report

In a notable development for Africa’s energy sector, Dangote Refinery Plc has reportedly started petrol production, representing Nigeria’s first petrol production in 28 years. 

This was confirmed by Devakumar Edwin, the vice president at Dangote Industries Limited on Monday, September 2 at the Berekete family show. 

He said, “So, the good news for the country is we have started producing PMS from our refinery since yesterday (Sunday).”

Edwin added that the Nigerian National Petroleum Company Limited (NNPC), the importer of petrol in Nigeria, will be the sole buyer of the refinery's product.

He further said, “If no one is buying it, we will export it as we have been exporting our aviation jet fuel and diesel.”

The Nigerian National Petroleum Corporation (NNPC), which has had difficulties satisfying domestic fuel requirements, announced on Sunday, September 1, that it has been experiencing intense financial strain, with a $6 billion debt owed to oil traders for supplies since January.

Commencement, highly timely given the current fuel challenges, Wallop

The high debt burden has affected the ability to consistently supply fuel in the local market, leading to ongoing fuel shortages since July and a sharp 45% rise in prices from the official rate of N617 ($0.3942) following the subsidy removal on May 29, 2023, by President Bola Tinubu.

Clementine Wallop, Director for Sub-Saharan Africa at the political risk consultancy Horizon Engage, remarked that the refinery's petrol production arrives at a crucial moment.

"The news that Dangote is processing gasoline couldn't come at a more crucial time given NNPC's statement about its difficulties securing imported supply due to financial strain. 

"This prompts the question of how NNPC will manage purchasing from Dangote, and impresses the need for greater transparency in its finances," Wallop stated. 

Dangote Refinery,  ready to export in the absence of domestic buyers 

It was reported that all the necessary criteria for certifying the suitability of refining assets have been adequately satisfied by the superstructure owned by Mr Aliko Dangote, Africa's richest business mogul. 

The Dangote Refinery, a $20 billion facility situated on the outskirts of Lagos, boasts a daily capacity of 650,000 barrels and is expected to greatly lessen Nigeria's reliance on imported oil products.

This development is expected to save the country significant foreign exchange, amounting to several billion dollars, and to improve the local supply of fuel, which is crucial for both commercial and residential use.

NNPC shifts its focus to CNG, reduces interest in Dangote refinery

Meanwhile, TheRadar earlier reported that the Nigerian National Petroleum Company (NNPC) Limited has confirmed that it has scaled back its interest in the Dangote Petroleum Refinery from 20% to 7.2%, reallocating resources to invest in compressed natural gas (CNG).

Femi Soneye, the spokesperson for NNPC, pointed out that CNG represents a budget-friendly choice for Nigerians, adding, “Switching to CNG will save Nigerians money.”

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Halima AdeosunAdmin

Halima Adeosun is a news writer with over 5 years of experience reporting insightful events, and human interest stories.

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