Source: Naira Metrics
Dangote oil refinery began supplying the Nigerian domestic market with petroleum products such as diesel and aviation jet fuel on Tuesday, according to sources familiar with the matter.
Abubakar Maigandi, the head of the Independent Petroleum Marketers Association of Nigeria, told Reuters that local oil marketers set the price at 1,225 naira ($0.96) per liter for diesel after securing a bulk purchase agreement, before adding their mark-up.
The association’s members control about 150,000 retail stations across Nigeria, Maigandi said.
The smaller Depots and Petroleum Products Marketers Association of Nigeria said its members were seeking letters of credit to buy petroleum products from Dangote.
- “Our members are discussing with banks and these talks have reached advanced stages, when we have our letters of credit, we will begin lifting products,” Femi Adewole, the association’s executive secretary said.
An executive from the company and various fuel marketing organizations told Reuters that oil marketers load diesel from the refinery, an important step in Nigeria’s drive for energy independence.
In addition, Devakumar Edwin, a group executive at Dangote, confirmed that the company has begun distributing diesel and jet fuel to the local market.
- “We have substantial quantities. Products are being evacuated both by sea and road. Ships are lining up one after another to load diesel and aviation jet fuel.
- “Ships load a minimum of 26 million liters, though we try to push for 37 million liters vessels, for ease of operations,” Edwin told Reuters.
What you should know
The Dangote refinery, positioned on a peninsula near Lagos’s commercial center, represents Africa’s largest refinery project, completed after many postponements and financed by Aliko Dangote, Africa’s wealthiest individual, with an investment of $20 billion.
- With the capacity to process up to 650,000 barrels per day, the refinery is set to be the largest in both Africa and Europe once it attains full operational capacity, expected this year or the next.
- The Dangote refinery is expected to significantly reduce Nigeria’s dependence on imported petroleum products.
- As Africa’s most populous country and leading oil producer, Nigeria paradoxically imports nearly all of its fuel.
- This is primarily due to the nation’s insufficient refining capabilities, which the new refinery aims to address.
THE AUTHOR: Cyrus Ademola is a political and economic analyst with over half a decade of experience in journalism, research-based op-eds, economic reportage, and political analysis.
