Nigeria’s Dangote Oil Refinery has started processing gasoline after delays caused by recent crude shortages, an executive announced on Monday. The $20 billion facility, located on the outskirts of Lagos and built by billionaire Aliko Dangote, initially began operations in January, producing products such as naphtha and jet fuel. With a capacity of 650,000 barrels per day, the refinery is the largest in Africa and aims to reduce Nigeria’s dependency on imported oil products.
“We are testing the product (gasoline) and subsequently it will start flowing into the product tanks,” said Devakumar Edwin, vice president at Dangote Industries Limited. He did not specify when gasoline would be available in the local market but indicated that state-owned NNPC Ltd, Nigeria’s sole gasoline importer, would be the primary buyer. Edwin noted that if NNPC does not purchase the gasoline, Dangote would consider exporting it, similar to how it exports aviation jet fuel and diesel.
The introduction of locally refined gasoline is expected to alleviate NNPC’s ongoing struggle to supply the Nigerian market, as the company faces $6 billion in debts to oil traders for supplies since January. This financial strain has led to persistent fuel shortages and long queues since July. Fuel prices have surged by 45% from the official price of 617 naira per liter ($0.39) following the removal of subsidies last year.
“The news that Dangote is processing gasoline couldn’t come at a more crucial time,” said Clementine Wallop, director of sub-Saharan Africa at political risk consultancy Horizon Engage. “This prompts the question of how NNPC will manage purchasing from Dangote and impresses the need for greater transparency in its finances.”
Despite being Africa’s top oil producer, Nigeria has been reliant on imported fuel for years due to the neglect of its national refineries. The launch of gasoline processing at the Dangote Refinery marks a significant step towards addressing this issue and securing the country’s energy needs.