Will Dangote Refinery Supply Petrol In Nigeria This Christmas?
The Dangote Refinery has started receiving crude oil supplies and plans to continue doing so in the next few weeks under supply agreement deals with the Nigerian National Petroleum Company Limited (NNPC) as well as Shell and ExxonMobil, according to officials familiar with the timeline.
However, the Dangote refinery will not be supplying petrol during the Christmas season.
This is because, according to the refinery timeline, there will be a startup of 350,000 barrels per day of refined products churned out at first and these products are primarily diesel and aviation fuel (Jet A1) and liquefied petroleum gas (LPG) also known as cooking gas.
This was confirmed in an official correspondence from the Dangote refinery, published on December 8 by Nairametrics.
A part of the correspondence stated:
- “The crude oil supply will facilitate the initial run of the refinery as well as kick-start the production of diesel, aviation fuel, and LPG before subsequently progressing to the production of Premium Motor Spirit (PMS).”
During a November 2023 interview with Financial Times, the Chairman of Dangote Group, Aliko Dangote said that the startup would begin with 350,000 barrels per day delivery, however, there is a plan to meet the refinery’s full capacity by the end of 2024.
Starting in January 2024, the Dangote Petroleum Refinery plans to begin manufacturing Automotive Gas Oil, commonly known as diesel, and JetA1 aviation fuel.
This production is intended to cater to the needs of domestic airlines and industries operating within Nigeria.
These fuels will be made available locally, serving the needs of various sectors within Nigeria. However, the production of Premium Motor Spirit, also called petrol, is scheduled to start later.
Petrol availability for Christmas in 2023
The Dangote refinery is expected to start producing petrol in 2024, which has been highly anticipated by Nigerians.
However, as of December 17, 2023, petrol is already available across the country. Despite this availability, there aren’t long queues for fuel. But there are a few important trends that have been observed by Nairametrics:
- Vehicle owners are cutting costs: NNPC retail stations nationwide are experiencing higher demand because vehicle owners are seeking more affordable petrol prices. Due to escalating commodity prices in the country, these stations are selling petrol between N568 to N617 per liter, with prices varying based on the state and location. States near loading depots tend to have slightly lower prices at NNPC retail stations.
- Low demand: With Christmas approaching, many vehicle owners are opting for public transportation as they find it challenging to afford petrol at higher prices. At private retail stations, the baseline price for petrol per liter is around N660.
- Supply is solely from NNPC: Some private retail station owners are either locking up their stations for days or using a few pumps to sell petrol, often due to a lack of immediate supply. These stations rely on new supplies from NNPC, which, since October 9, has become the sole importer of petrol into Nigeria due to the scarcity of foreign exchange faced by independent marketers.
- No black-market traders yet: In Abuja, for example, there has been no presence of black-market traders selling petrol as of December 17. This absence is because many official retail stations are still operating despite low demand. However, fewer vehicles are buying petrol due to increasing costs.
Note that these costs are expected to rise further as the year ends, which will likely lead to even higher road transportation expenses.
SOURCE: Nairametrics
