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Monday, April 15, 2024

Dangote Petroleum Refinery initiates fuel sales with export tenders

Africa's largest refinery sets sail in the export market, marking a pivotal moment in Nigeria's energy landscape

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The eagerly anticipated Dangote Petroleum Refinery has embarked on its maiden voyage into fuel sales, signaling a significant milestone in Nigeria’s energy sector. Trading sources familiar with the matter revealed that the refinery, commissioned last May by former President Muhammadu Buhari, has issued tenders to sell two fuel cargoes for export, marking the first offerings from the newly operational facility.

Nigerians have long awaited the debut of products from the $20 billion Dangote refinery, which holds the promise of transforming Nigeria from a fuel importer to a net exporter in the West African region. However, regulatory approvals reportedly hindered the refinery’s initial plans to release aviation fuel (Jet A1) and diesel into the local market in January.

Despite hurdles in regulatory approvals, Dangote refinery commenced the production of automotive gas oil (diesel) and aviation fuel (Jet A1) on January 12, 2024, from its colossal facility located on the outskirts of Lagos, spearheaded by Africa’s wealthiest individual, Aliko Dangote.

The refinery’s first cargo, comprising 65,000 metric tonnes of low-sulphur straight-run fuel oil, has been awarded to Trafigura and is scheduled for loading at the end of February, according to trading sources. Meanwhile, a tender for approximately 60,000 metric tons of naphtha is also underway, with a closing date of February 15.

While the refinery gears up to serve the domestic market, experts caution that it may take months for upgrading units to be fully operational. Despite this, Dangote has made strides in securing crude supply, including purchases from the United States, with two million barrels of US WTI Midland expected to arrive in early March.

The initiative by the Dangote Petroleum Refinery marks a pivotal shift in Nigeria’s energy dynamics, offering the potential to reshape the region’s power and profit dynamics. However, the refinery’s foray into exports underscores its ambition to become a key player in the global energy arena, representing a significant step forward for Nigeria’s energy independence and economic development.

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