Dangote Petroleum Refinery is in the business of reselling crude oil shipments originating from the United States and Nigeria. According to sources from Reuters, the refinery’s decision to take this unusual action is due to technical difficulties within the facility. An executive from Dangote inquired about the current offers in the market and mentioned that the refinery was experiencing some operational challenges that were impacting the crude distillation unit (CDU), even though the CDU was still functioning.
Upon its launch in January 2024, the refinery set out to become the biggest in Africa and Europe once it reaches full capacity. The goal is to transform the country from a net fuel importer to a fuel exporter. Likewise, recent incidents hint at the refinery’s operational challenges, particularly with its petrol distillation unit. Despite these setbacks, a Dangote executive affirms that the CDU is operational. According to sources who spoke to Reuters, shipments of Nigerian Escravos and Forcados crude and U.S. WTI Midland crude are available. Traders have mentioned that the plant receives multiple raw shipments every month.
Demand for imports is expected to continue rising in the coming months.
Aliko Dangote, Africa’s richest person, has invested $20 billion in building a 650,000 barrels per day facility, making a notable contribution to the national oil and gas industry. It aims to lessen the nation’s reliance on imported fuel, a persistent problem even though the country is the leading oil producer in Africa. Amid other major developments, the Dangote Group is gearing up to launch its factory and a fertiliser subsidiary on the Nigerian Stock Exchange by early 2025. This listing strategy aims to reduce the strain of foreign exchange rates on the national economy.
Last year, the factory acquired significant U.S. raw oil, specifically over 16 million barrels of West Texas Intermediate crude in 2024. The increasing demand for imports is predicted to persist in the upcoming months. The factory aims to fulfil the entirety of the nation’s need for refined Petroleum products and even produce extra for export, but the existing technical challenges are a major limitation in achieving this goal. Earlier this month, the Nigerian Upstream Petroleum Regulatory Commission and petrol producers resolved to provide domestic refineries with natural Fossil Fuel at market prices, ending a prolonged supply conflict.
Crude oil shortages are affecting the daily activities of citizens.
Furthermore, the decision to take this unconventional action results from technical issues at the plant. Although the CDU faces operational challenges, Tony Chiejina, a Dangote group spokesperson, has verified that it is still operating. The plant is regularly supplied with Nigerian Escravos and Forcados crude, along with U.S. WTI Midland crude, with multiple shipments arriving each month. He mentioned that they increased their oil procurement from Angola and Libya. Additionally, the performance of the petroleum distillation unit is excellent.
In light of the nation’s prevailing economic difficulties, it is vital for the federal government to focus on and enforce strategies aimed at guaranteeing a steady flow of natural fossil fuel to local refineries at equitable prices. The ongoing scarcity of hydrocarbon supply to consumers is significantly impacting the day-to-day activities of Nigerian citizens. One way to address this issue is by updating regulations to streamline processes and decrease administrative bottlenecks. Offering financial rewards or assistance for modernising Technology and upkeep could also improve the efficiency of refineries such as Dangote’s in tackling technical barriers.
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Lastly, their presence is essential in promoting partnerships between domestic oil refineries and global counterparts to boost knowledge and creativity. By establishing a conducive environment for investments, the authorities can draw in foreign direct investments that are vital for the enduring development and advancement of the nation’s hydrocarbon and gas sector. Chiejina emphasised the importance of ignoring any misleading information aimed at sabotaging the factory. He encouraged the public to dismiss these fabricated stories, likely fuelled by those against domestic fuel production.