Dangote Refinery has begun processing petrol following delays caused by recent crude scarcity, Journalists reported on Monday, citing DIL executives.
The Nigerian National Petroleum Corporation (NNPC) Ltd, Nigeria’s only importer of petrol, will be the exclusive buyer of the refinery’s gasoline, according to Devakumar Edwin, vice president of Dangote Industries Limited.
The news came a day after NNPC said it was facing severe financial difficulties as it dealt with mounting debts to petrol suppliers, raising concerns about the sustainability of Nigeria’s fuel supplies.
The $20 billion Dangote Refinery, built by Nigerian billionaire Aliko Dangote, began operations in January and initially produced products such as diesel and jet fuel.
The refinery, Africa’s largest, with a production capacity of 650,000 barrels per day, is expected to significantly reduce Nigeria’s reliance on imported petroleum products.
We are testing the product (Petrol) and subsequently, it will start flowing into the product tanks,” said Devakumar Edwin, vice president of Dangote Industries Limited. However, Edwin did not provide any information on when the petrol would be available in the local market.
Edwin also said the Nigerian National Petroleum Corporation (NNPC), the sole importer of petrol in the country, would only buy petrol from the refinery. He further added, “If no one is buying it, we will export it as we have been exporting our aviation jet fuel and diesel.”
The introduction of petrol from Dangote refinery is expected to ease some of the supply problems facing NNPC. Since January, NNPC has incurred $6 billion in debt with oil traders, undermining its ability to meet the country’s fuel demand. This has led to long queues at petrol stations across the country since July, which has led to higher fuel prices.
Despite being the largest oil producer in Africa, Nigeria imports almost all of its fuel as domestic refineries continue to be neglected. Gasoline production at the Dangote refinery is seen as an important step towards resolving this long-standing problem.
However, concerns have been raised over the sustainability of the country’s fuel supply as the Nigerian National Petroleum Corporation (NNPC) has said it faces severe financial challenges as it deals with mounting debts to oil suppliers.
This comes shortly after the company announced a record net profit of 3.297 trillion for the fiscal year ending December 2023, a significant increase of 749 billion (28%) over the profit of 2.548 trillion reported in 2022. The company also announced a massive final dividend of $2.1 trillion.
In a press release issued on Sunday by its Chief Corporate Communications Officer, Mr. Olufemi Soneye, NNPC acknowledged the national newspaper reports about the large debt.
The company said the financial burden has put enormous pressure on the company’s operations and poses a potential threat to its ability to maintain a stable fuel supply across the country.
“The financial strain has placed considerable pressure on the Company and poses a threat to the sustainability of fuel supply,” the statement stated.
NNPC plays a key role in ensuring the availability of petroleum products and this responsibility is highlighted in the Petroleum Industry Act (PIA). The company reiterated its commitment to the task despite current challenges, saying, “NNPC Ltd remains dedicated to its role as the supplier of last resort, ensuring national energy security.”
