Dangote: Refined Oil To Be Sold In Dollars As Operation Begins October

Dangote: Refined Oil To Be Sold In Dollars As Operation Begins October

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Dangote Refinery will finally begin operations in October 2023, says the Group Executive Director, Devakumar Edwin.

According to him, the facility will begin refining diesel and jet fuel by October 2023, while that of petrol commences by November 2023.

Speaking in an interview with S&P Global Commodity Insights on Monday, Edwin said the company is ready and is waiting to receive its first crude, to begin refining.

He revealed that the company would begin by producing up to 370,000 barrels per day of diesel and jet fuel in October 2023 and gradually increase production to meet the 650,000 barrels per day by November 30.

“Right now, I’m ready to receive crude. We are just waiting for the first vessel. And so, as soon as it comes in, we can start,” he said in the conversation with S&P.

The Dangote Refinery boss further revealed that oil refined in the facility would be bought in US dollars, and not naira because it is in a free trade zone on the outskirts of Lagos. However, the NNPCL will supply some crude at knockdown prices due to its equity stake.

NNPCL has a 20 per cent equity stake in the oil company.

Recall that the refinery which was commissioned on 22 May 2023 was originally billed to commence operations in June but couldn’t. Explaining the reason for the shift in the original timeline, Edwin said it was because the Nigerian National Petroleum Corporation Limited had already committed their crude oil to another entity on a forward basis, causing a temporary delay.

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Edwin further stated that, aside from heavy Angolan grades, the Dangote refinery can process most African crudes, as well as Middle Eastern Arab Light and even US light-tight oil.

He said: “We can take even some of the Russian grades… if the global system opens up to allow us to receive them. Basically, if you look at our production profile, 50% of my production will meet 100% of the requirements of the country.

“Excess gasoline – which will be 10 ppm sulfur Euro 5 quality — will be exported to other African markets as well as the US and South America, although the volumes will be relatively small. Meanwhile, jet fuel will be exported to Europe and diesel will be sold in sub-Saharan Africa.”

Edwin stated that the refinery would play a critical role in mitigating the fuel supply challenges that Nigeria is grappling with because of its import-dependent nature.

Commencement of operations of the refinery, coming at a time when the country is reeling under the burden of high petrol prices due to the recent removal of subsidies on the commodity, would be a soothing balm to the economic pains of the people.

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However, analysts have observed that only the Dangote Refinery can’t resolve the petrol supply challenges in the country. They averred that allowing the refinery to have the monopoly of supply would not be in the good interest of the economy in that sector.

They advised the government to give room for more private sector-led refineries to emerge and increase production.





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