The Nigerian National Petroleum Corporation (NNPC) Limited has begun to load Premium Motor Spirit (PMS) from Dangote’s mega refinery in Lekki, Lagos, signaling a potentially transformative moment in Nigeria’s petrol industry. The $20 billion refinery, representing a significant investment in Nigeria’s petroleum sector, is poised to provide a new and potentially more efficient supply route for the country’s petrol needs, potentially heralding a new era in Nigeria’s fuel supply chain
According to Aliko Dangote, president of the Dangote Group, the refinery has enough capacity to meet the petrol needs of not only Nigeria but the entire sub-Saharan Africa region.
“The capacity that we have will not only meet up with the Nigerian demand, it will meet up with the demand of sub-Saharan Africa, at least,” he said at a press conference on Tuesday while inspecting the 650,000 barrels per day refinery.
He added, “As you know, there’s quite a lot of what you call round-tripping, where people now do documentation and the fuel does not come into Nigeria. So right now, as we have this refinery working, it will show the true consumption of Nigeria. We can track every single loaded truck and we will try as much as possible to track the loaded ships, trucks who can tell you where they are.”
Experts say the refinery will bring much-needed relief to Nigerians currently suffering from petrol shortages across the country.
“Our PMS can be in filling stations within the next 48 hours, depending on NNPC,” Aliko Dangote said on Tuesday.
He assured Nigerians of high-quality petrol from his refinery, saying the refinery will help alleviate problems associated with dirty fuel.
“We will offer good petrol while the engines of your vehicles will last longer. You will not be having an engine issue, which a lot of us were having. It won’t happen at all.” They will not have engine problems like many of us do. It will not happen at all.”
He added, “The quality here will match that of anywhere in the world: US, America. We will make sure that nobody will beat us in terms of quality.”
Refinery to supply 25 million litres;
The Nigerian Midstream Petroleum Regulatory Agency (NMDPRA) has announced that the Dangote refinery will supply a total of 25 million litres of petrol to the Nigerian market daily from September.
NMDPRA announced on Tuesday that this volume will increase to 30 million litres from September.
NMDPRA, in a short statement, said it had met with NNPC Limited to arrange for local crude oil supplies to the refinery. NNPCL signed an agreement at the NMDPRA headquarters in Abuja to begin selling and supplying crude oil in local currency to the Dangote Refinery.
“The refinery is now poised to supply an initial 25 million litres of PMS into the domestic market this September. And will subsequently increase this amount to 30 million liters daily from October 2024,” NMDPRA said.
Days of indulging in foreign powers – Otedola;
Femi Otedola, billionaire and chairman of Geregu Power, said the successful operation of the Dangote Refinery could reduce the importance of local depots, which have traditionally relied on fuel imports to meet domestic demand.
“The depot owners should take heed—it’s time to dismantle those depots and sell them as scraps while the market is still high. The world has changed, and those who do not adapt will be left behind,” Otedola said on his X handle on Tuesday.
Otedola recalled when he and Dangote formed the Blue Star Consortium to acquire stakes in refineries in Kaduna and Port Harcourt.
“The days of bowing to foreign powers for our fuel needs are over. You have dealt a death blow to the so-called local cabals who have fattened themselves for years, feeding off our nation’s economic slavery,” Otedola said.
He added, “These cabals, who have grown rich by keeping Nigeria in a perpetual state of dependence, must now face the reality that their era of easy gains is coming to an end. I am reminded of the time you revolutionized the cement industry in Nigeria”.
Otedola noted Dangote’s unwavering commitment to his vision of transforming Nigeria’s energy landscape.
“You never gave up on the dream we shared,” Otedola wrote.
Reduction in logistics costs;
Ayodele Oni, senior partner at Bloomfield Law, expressed cautious optimism about the impact of the 650,000 barrels per day refinery on PMS prices.
According to him, the Dangote refinery will solve the logistics problems facing the oil industry today. He also noted that reducing PMS import costs would lead to a reduction in products, regardless of other prevailing market realities.
“Refining within Nigeria could lead to some changes in fuel pricing. This is because the reduction in logistics costs eliminating the need for large vessels to transport products—may help lower PMS prices.
“However, it’s important to note that a significant portion of PMS pricing is influenced by the international crude oil market,” Oni said.
European refineries;
Data shows that Nigeria received nearly 250,000 barrels per day of shipments last year, mostly from Europe, and continues to be a receptacle of global demand for European fuels, with Dangote’s production expected to have a multibillion-dollar impact on regional and international fuel market trade. Analyst Vortexa Corp. appears.
For decades, European refiners have secured a lucrative market in Nigeria, where companies in Africa’s fourth-largest economy have been forced to rely heavily on imported refined products worth a net $17 billion per year due to unreliable power from the domestic grid.
Trade and shipping data obtained by Journalists shows that Nigeria’s new Dangote refinery is boosting gasoline exports to West Africa, taking market share from European refineries.
“As much as 300-400,000 barrels per day (bpd) of refining capacity in Europe is at risk of closure because of rising global gasoline production,” Andon Pavlov, an analyst at global trade intelligence platform Kpler, said in a note.
