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Key Points
- Dangote Oil Refinery, Africa's largest refinery, will soon sell petrol after successful test runs and ongoing government negotiations.
- The $20-billion refinery's 650,000-barrel-per-day capacity test is complete; distribution details are being finalized with NNPC.
- Nigerian government confirmed NNPC will handle initial petrol sales from Dangote's refinery, amid local supply challenges and disputes.
Dangote Oil Refinery, Africa’s largest petrochemical refinery owned by Nigerian billionaire Aliko Dangote, is poised to commence the sale of Premium Motor Spirit (PMS), commonly known as petrol, following successful test runs and ongoing negotiations with the Nigerian government.
The $20-billion refinery recently completed a critical test run of its 650,000 barrels-per-day capacity, a significant step towards the official market rollout. However, the final details regarding the product’s distribution are still being hammered out between the Dangote Group and the Nigerian National Petroleum Company Limited (NNPCL).
Dangote Oil Refinery overcomes hurdles, NNPC takes charge of petrol sales
A government official confirmed that the Nigerian National Petroleum Company Limited (NNPC) will exclusively handle the initial sales of petrol from Dangote's refinery, as both sides finalize circulation terms.
The Dangote refinery, which was expected to start petrol production in June, faced delays due to a crude oil shortage and a dispute with the Nigerian Midstream and Downstream Regulatory Authority over substandard diesel production. The situation improved after the Federal Government arranged local currency crude supplies, set to begin in October.
Dangote and other local refiners have criticized international oil companies (IOCs) for withholding crude from Nigerian refineries, forcing costly imports from distant sources like the U.S. Devakumar Edwin, Dangote Industries Limited’s vice president for oil and gas, accused IOCs of sabotaging operations by imposing high premiums on local crude.
Dangote clarifies crude oil supply: No NUPRC allocation
Located near Lagos, the Dangote Petrochemical Complex is a major milestone in Nigerian industrial development, featuring a one-million-metric-tonne-per-year polypropylene plant and two large fertilizer trains with a combined annual capacity of three million tonnes of urea.
Contrary to reports that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) facilitated the allocation of 29 million barrels of crude to the Dangote refinery, the Dangote Group denied receiving such a supply.
“We appreciate NUPRC’s statement regarding the crude oil allocation but would like to clarify that we have not yet received these cargoes,” said Anthony Chiejina, spokesperson for the Dangote Group. “Apart from the term supply negotiated bilaterally with NNPCL, the NUPRC has only facilitated the purchase of one crude cargo from a domestic producer. Other processed cargoes were purchased from international traders.”
