Dangote Refinery to Sell Petrol to Nigeria in Dollars.
LAGOS, NIGERIA – Dangote Refinery, one of Africa’s largest petroleum refining facilities, is poised to commence production after encountering several delays since its commissioning in May 2023. Devakumar Edwin, the Group Executive of Dangote Refinery, has revealed that the facility will begin refining diesel and jet fuel by October 2023, with petrol production to follow in November 2023.
Speaking in an interview with S&P Global Commodity Insights, Edwin expressed the refinery’s readiness to receive its first crude shipment, marking a significant milestone in its operational timeline. The initial production is set at 370,000 barrels per day of diesel and jet fuel in October 2023, with gradual scaling to reach 650,000 barrels per day by November 30.
Edwin: Dangote Refinery to Sell Petrol to Nigeria in Dollars
Edwin emphasized the refinery’s pivotal role in addressing Nigeria’s persistent petrol importation challenges. However, it’s worth noting that there’s a distinctive aspect to Dangote Refinery’s approach – the refined oil products will be sold in US dollars, not the Nigerian naira.
Explaining this decision, Edwin cited the refinery’s location within a free trade zone on the outskirts of Lagos. He clarified, “That Nigerian oil will be purchased in US dollars, not naira as some reports had suggested because it is located in a free zone.”
Furthermore, Edwin stressed the importance of diversifying the sources of crude oil processed at the facility. While the refinery will refine Nigerian crude, it will also process crude from other countries. This strategy aims to reduce dependency on Nigerian crude, thereby enhancing operational flexibility.
Edwin highlighted the refinery’s capability to process various African crudes, with the exception of heavy Angolan grades, Middle Eastern Arab Light, and US light tight oil. He stated, “We can even take some of the Russian grades… if the global system opens up to allow us to receive [them].”
In a related development, a Nigerian company recently achieved a significant milestone by becoming the first independent marketer to successfully import petrol into the country. This marks a shift away from the Nigerian National Petroleum Company Limited’s (NNPCL) historical monopoly as the sole importer of petroleum products. With the end of the subsidy regime, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has begun issuing licenses to oil marketing companies, ushering in new possibilities for the Nigerian petroleum industry.
As Dangote Refinery’s production gears up and the industry evolves, Nigeria’s energy landscape is poised for significant transformations with implications for both domestic and international markets.
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