Dangote Oil Refinery Begins Local Supply, Eases Nigeria’s Fuel Cost Woes
By William Emmanuel Ukpoju
Nigeria’s energy landscape welcomed a game-changing development as the Dangote oil refinery initiated supplying petroleum products to the local market. This move promises relief for businesses and manufacturers grappling with soaring diesel costs.
The massive refinery, a $20 billion investment spearheaded by Africa’s wealthiest man, Aliko Dangote, has finally commenced operations after enduring multiple delays. Situated on the fringes of Lagos, Nigeria’s bustling commercial hub, the facility boasts a refining capacity of up to 650,000 barrels per day (bpd). Upon reaching full operational capacity, it is poised to claim the title of the largest refinery in Africa and Europe, a significant feat anticipated for this or next year.
Confirming the momentous step, Dangote’s group Executive, Devakumar Edwin, disclosed the shipment of diesel and jet fuel into the local market, both by sea and road. With vessels queuing up to load the products, the refinery’s impact on Nigeria’s fuel sector is palpable.
In a concerted effort, local oil marketers have settled on a price of 1,225 naira ($0.96) per litre of diesel, facilitated by a bulk purchase agreement. However, the final cost to consumers may include mark-ups by these marketers.
Crucially, the commencement of operations at the Dangote refinery holds the promise of curbing Nigeria’s heavy reliance on imported petroleum products. Despite its status as Africa’s most populous nation and top oil producer, Nigeria’s dependence on fuel imports has persisted due to insufficient domestic refining capacity.
Various oil marketer associations, including the Independent Petroleum Marketers Association of Nigeria and the Depots and Petroleum Products Marketers Association of Nigeria, are actively engaged in discussions and preparations to procure petroleum products from the Dangote refinery.
The dawn of local supply from the Dangote oil refinery marks a turning point in Nigeria’s quest for energy independence, offering a beacon of hope for economic development and reduced import dependency in the nation’s fuel sector.
