….First Batch of 25M Litres of Petrol Ready to Hit Nigerian Market
The Dangote Refinery, Africa’s largest oil refining facility, officially commenced petrol production on Tuesday, 3 September 2024.
This development is expected to significantly impact Nigeria’s fuel supply, reducing the country’s reliance on imported petroleum products.
The refinery, located near Lagos, will initially supply 25 million litres of petrol daily, with plans to increase this to 30 million litres by October, according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA.
Speaking at a press conference on Tuesday, Aliko Dangote, Chairman of Dangote Industries Limited (DIL), expressed his excitement about this milestone.
He displayed a bottle of the product, also known as Premium Motor Spirit, PMS, and emphasised the quality of the petrol produced at the refinery.
“Today is a very special day,” Dangote said. “Nigeria has not produced petrol, which is gasoline, for many years, but I stand with you today. The quality here will match that of anywhere in the world. We will make sure that nobody will beat us in terms of quality.”
Dangote attributed the refinery’s success to the conducive environment created by President Bola Tinubu’s administration. He praised the government’s “naira for crude” policy, which he believes will stabilise the naira by reducing the demand for dollars. “This will help bring down inflation and reduce the cost of living,” he added.
The refinery, which can process 650,000 barrels of oil per day, began operations in January and initially produced diesel and aviation fuel.
According to Devakumar Edwin, a Vice President at Dangote Industries Limited, the refinery is now testing petrol and will soon start delivering it to the local market.
“We are testing the product, and subsequently, it will start flowing into the product tanks,” Edwin stated. However, he did not specify the exact date when the petrol would be available to the public.
The Nigerian National Petroleum Company Limited, NNPCL, has agreed to purchase exclusively the petrol produced by the Dangote Refinery.
Edwin mentioned that if the NNPC does not buy the product, it will export it, as it has been doing with its aviation fuel and diesel.
This development comes at a crucial time, as the NNPC has been struggling to supply the local market due to financial constraints.
The company is reportedly reeling under debts of US$6 billion owed to oil traders for supply since January, leading to persistent fuel queues across the country.
Industry experts have lauded the commencement of petrol production at the Dangote Refinery.
Clementine Wallop, Director of Sub-Saharan Africa at political risk consultancy Horizon Engage, remarked, “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.” She also called for greater transparency in NNPC’s finances, particularly in light of this development.
In a related development, the Organisation of Petroleum Exporting Countries, OPEC, reported a decline in oil output in August, largely due to disruptions in Libya. However, Nigeria saw a slight increase in production, boosting its exports.
The Dangote Refinery’s petrol production is expected to further enhance Nigeria’s oil sector, reducing the need for imports and stabilising the domestic market.
The refinery’s ramp-up has been a long time coming, following years of delays. However, with production now underway, Dangote is confident that the refinery will play a pivotal role in Nigeria’s economic growth.
“As we have this refinery working, it will show the true consumption of Nigeria,” Dangote said. He also noted that the refinery’s operations would help track petrol consumption across the country, reducing issues related to round-tripping and false documentation in the oil industry.
In addition to petrol production, Dangote announced that Nigeria will soon be self-sufficient in polypropylene production, a key substance used in manufacturing packaging materials and plastics. This is expected to reduce costs for industries that have struggled with importation delays.
As Dangote Refinery begins petrol production, Nigerians look forward to a more stable and self-reliant fuel supply, reducing its dependence on imports and saving valuable foreign exchange.
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