Dangote Oil Refinery has begun processing of gasoline after delays caused by a recent crude shortage according to the Vice President of Dangote Industries Limited, Devakumar Edwin.
The $20 billion refinery on the outskirts of Lagos, built by Nigerian billionaire Aliko Dangote, began operations in January with output of products including naphtha and jet fuel.
With a capacity of 650,000 barrels per day, Africa’s largest refinery promises to ease oil producer Nigeria’s costly reliance on imported oil products.
“We are testing the product (gasoline), and subsequently it will start flowing into the product tanks,” said Devakumar Edwin.
He did not say exactly when the gasoline would hit the local market.
Edwin said state oil firm NNPC Ltd., Nigeria’s sole importer of gasoline, would buy its gasoline exclusively.
“If no one is buying it, we will export it as we have been exporting our aviation jet fuel and diesel,” Edwin said.
The delivery of gasoline into the Nigerian market will ease NNPC’s struggle to supply the local market. The company is reeling with debts of $6 billion to oil traders for supply since January.
This has affected its ability to supply the local market, where fuel queues have persisted since July.
“The news that Dangote is processing gasoline couldn’t come at a more crucial time given NNPC’s statement about its difficulties securing imported supply due to financial strain,” said Clementine Wallop, Director of sub-Saharan Africa at political risk consultancy Horizon Engage.
She said this “prompts the question of how NNPC will manage purchasing from Dangote and impresses the need for greater transparency in its finances.”
Prices have jumped by 45% from the official price of 617 naira ($0.3942) announced after subsidies were removed last year.
The Dangote Refinery, Africa’s largest, is engineered to handle 100% Nigerian crude while also being adaptable to other crude types. It processes a range of African crude grades, Middle Eastern Arab Light, US Light tight oil, and more.
(The Trumpet)
