Dangote Refinery Starts Gasoline Production As Nigeria Faces Fuel Crisis
THE Dangote Oil Refinery in Nigeria, the largest in Africa, has commenced gasoline production after delays caused by recent crude shortages, a company executive announced on Monday. The $20bn facility, located on the outskirts of Lagos, was built by Nigerian billionaire Aliko Dangote and began operations in January, producing various outputs including naphtha and jet fuel.
With a massive capacity of 650,000 barrels per day, the refinery is expected to reduce Nigeria’s heavy reliance on imported oil products, a costly burden for the country despite being Africa’s top oil producer.
‘We are currently testing the gasoline product, and soon it will begin flowing into the product tanks,’ said Devakumar Edwin, Vice President of Dangote Industries Limited. While he did not specify when the gasoline would be available on the local market, Edwin noted that Nigeria’s state-owned oil firm, NNPC Ltd, which is the sole importer of gasoline, would exclusively purchase the refinery’s output.
‘If no one buys it locally, we will export it, as we have been doing with our aviation jet fuel and diesel,’ Edwin added.
The introduction of gasoline from the Dangote refinery is anticipated to provide much-needed relief to NNPC, which has struggled to meet the local market’s demands due to financial constraints. The company is currently grappling with a $6bn debt owed to oil traders for supply since January, which has severely impacted its ability to maintain adequate fuel supplies, leading to persistent fuel shortages and long queues at filling stations since July.
Fuel prices have surged by 45 percent from the official price of 617 naira ($0.3942) per litre, following the removal of subsidies last year. The news of gasoline production at Dangote’s refinery is timely, considering NNPC’s recent admission of difficulties in securing imported supplies due to financial pressure.
‘The commencement of gasoline processing at the Dangote refinery comes at a critical juncture, given NNPC’s recent statements about its challenges in securing fuel imports,’ said Clementine Wallop, Director for sub-Saharan Africa at political risk consultancy Horizon Engage. ‘This raises questions about how NNPC will manage its purchasing arrangements with Dangote and highlights the need for greater transparency in its financial dealings,’ she told Reuters.
Despite being Africa’s largest oil producer, Nigeria imports nearly all of its refined fuel due to the prolonged neglect of its national refineries. The Dangote refinery’s entry into gasoline production marks a significant step toward addressing the nation’s chronic fuel supply issues.
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