Nigeria’s Dangote Refinery has begun supplying petroleum products, including diesel and aviation fuel, to the domestic market, signifying a significant milestone in the country’s pursuit of energy self-sufficiency. This development was confirmed on April 2nd, 2024 by a Dangote Refinery executive and officials from fuel marketing associations, according to a report by Reuters
The Dangote Refinery, situated on the outskirts of Lagos, is the largest refinery in Africa with a processing capacity of up to 650,000 barrels per day (bpd). Devakumar Edwin, a Dangote executive, remarked on the substantial quantities of fuel being transported, both by sea and road, to meet the high demand. Edwin further stated, “Ships are lining up one after another to load diesel and aviation jet fuel.”
This commencement of fuel supply is anticipated to play a key role in reducing Nigeria’s dependence on imported petroleum products. The expectation is that the Dangote Refinery will reach its full operational capacity later this year, solidifying its position as the biggest refinery in Africa and Europe.
Nigerian diesel prices have shown signs of stabilization after local oil marketers struck a deal with Dangote Refinery. The Independent Petroleum Marketers Association of Nigeria (IPMAN), representing a vast network of 150,000 retail stations nationwide, agreed on a price of 1,225 naira ($0.96) per litre for bulk purchases of diesel, according to IPMAN chairman Abubakar Maigandi.
This agreement signifies a significant development for Nigeria’s fuel market. Previously, the country relied heavily on imported petroleum products. The commencement of domestic supply from Dangote Refinery, Africa’s largest, is expected to improve stability and potentially lead to price reductions in the long run. However, not all marketers are immediately able to access Dangote’s supply.
The Depots and Petroleum Products Marketers Association of Nigeria (DAPPMA) is currently working on securing letters of credit, a financial instrument that guarantees payment to the refinery. Femi Adewole, DAPPMA’s executive secretary, expressed optimism, stating that discussions with banks are “at an advanced stage” and product purchases will commence upon securing the letters of credit.
The commencement of domestic fuel supply comes after the refinery previously faced delays in securing regulatory approvals for the sale of its products.
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