Nigeria’s Dangote refinery is expected to commence gasoline production in September 2024.
This marks a significant development for Nigeria’s oil sector, as the refinery has been anticipated to contribute substantially to the domestic supply of the product.
The 650,000-barrel-per-day Dangote refinery is undergoing test runs for the petroleum production, with full operation expected by mid-September, according to a note by industry monitor IIR Energy.
The $20-billion Dangote refinery, built by Africa’s richest man, Aliko Dangote, on the outskirts of Lagos, began operations in January after years of delays.
Dangote, which has so far only produced diesel and other distillate fuels, had earlier said that gasoline deliveries from the refinery would start in July. Earlier, the refinery had aimed to start making the motor fuel by May.
It is possible that there could be further extensions, IIR said in a note to clients.
Once fully operational, the refinery is set to upend the Europe-to-Africa fuel trade and reduce Nigeria’s reliance on imported refined products.
Regulatory approval
The refinery has received regulatory approval for its secondary units, including a fluid catalytic cracker and an alkylation unit. Although these units were approved earlier in the year, their start-up has been deliberately delayed as the refinery aims to focus on selling much of its gasoline output within the domestic market. The Nigerian government continues to intervene in pricing through state-owned NNPC (Nigerian National Petroleum Corporation), which affects how gasoline is sold locally.
In addition to this, it is noteworthy that the Port Harcourt refinery is also expected to restart operations by August 31, 2024. This dual increase in production from both refineries could have significant implications for gasoline availability not just within Nigeria but also in neighboring regions and northwest Europe.
Furthermore, there are plans for NNPC to sell crude oil to Dangote in local naira currency starting October 1, 2024. This initiative aims to alleviate concerns regarding dollar expenditures and ensure that Dangote can secure crude supplies more effectively.
Overall, with both refineries ramping up production and strategic initiatives being put into place by the government and NNPC, Nigeria is poised for a notable increase in domestic gasoline supply beginning this September. – NS
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