The Dangote Refinery is set to receive approximately 24 million barrels of Nigerian crude oil in October and November, reflecting a strategic pivot towards utilizing more domestic supply. This allocation translates to about 400,000 barrels per day over the next two months, as indicated by a cargo allocation list reviewed by Bloomberg.
This initiative aligns with the federal government’s new oil sales strategy that began on October 1, introducing naira-denominated crude oil sales to the Dangote Refinery. The aim is to reduce reliance on the dollar, thereby enhancing economic stability and transparency within the oil sector.
Additionally, reports suggest that the Nigerian National Petroleum Company Limited (NNPCL) may no longer act as the sole off-taker for petrol from Dangote, allowing other marketers to negotiate prices directly. This change is expected to foster competition and stabilize supply chains in Nigeria’s oil market.
Currently, NNPCL purchases petrol at N898.78 per litre and sells it to marketers at a subsidized rate of N765.99, incurring a subsidy of about N133 per litre. Analysts caution that this shift could lead to higher fuel prices as the subsidy system unwinds.
The arrangement allows Dangote to receive 40,000 barrels per day, a crucial step toward alleviating foreign exchange pressures and saving approximately $7.32 billion annually on petrol imports. This move is expected to stabilize fuel prices and enhance domestic refining capabilities, marking a significant transformation in Nigeria’s energy landscape.
While the Dangote Refinery aims to process up to 400,000 barrels per day and reach full capacity in the coming months, analysts warn that increased demand may tighten the West African crude market, potentially pushing Nigeria’s crude exports below one million barrels daily.
Despite anticipated delays in some shipments, the upcoming volumes exceed the refinery’s average intake of 255,000 barrels per day in the first half of the year, as it gradually ramps up operations. The refinery, currently operating at 60-70% capacity, is managed by Engineers India Limited, and plans to operate at full capacity soon.
Experts believe that as the Dangote Refinery enhances its production rates, Nigeria may be on track to reduce its costly imports of refined oil products, diminishing the region’s need for gasoline and diesel imports.
Scores of persons were confirmed to have been killed by unknown gunmen in Garin Baka village of Ardo-Kola Local Government Read more
In 2016, Ibrahim Ogbanago, a security officer working at a UBA branch in Ikeja, Lagos State gained prominence for returning Read more
Nyesom Wike, the governor of Rivers State, and Ayo Fayose, the former governor of Ekiti State, have drawn conflicting responses Read more
A video which has stirred reactions from Nigerians online shows officials of the Lagos State Rail Transport pushing a train. Read more
