Dangote’s refinery, with a capacity of 650,000 barrels per day, is set to commence production of 10 parts per million (ppm) sulphur diesel (ULSD) in the week starting 17 June, followed by petrol production as early as 10 July. Aliko Dangote shared this update in an interview with Channels Television on 11 June.
This schedule indicates a slight delay from the previous guidance provided by Devakumar Edwin, the company’s vice president for oil and gas in May, regarding diesel exports and local gasoline sales for this month.
Dangote highlighted concerns about the quality of diesel in the offshore Lome market, noting that West Africa has been receiving low-quality oil products, with sulphur content ranging from 2,000ppm to 3,000ppm, which were previously imported into Nigeria.
During the interview, Godswill Akpabio, the president of Nigeria’s Senate, praised Belgium’s decision to ban the export of low-quality fuels. Belgium’s share of Nigeria’s seaborne gasoil and diesel imports has decreased from 22% last year to 9% this year, according to Vortexa. However, Belgium has increased its share of the Nigerian finished-grade gasoline import market to 35% from 29% in 2023.
Up until now, the Dangote refinery has been producing gasoil with a sulphur content of around 680-700ppm for both local and international markets.
Recent gasoil loadings of at least 20,000 tonnes free on board (fob) Dangote were offered at discounts ranging from $35/t to $30/t against front-month Ice gasoil futures, as per sources. These discounts are notably lower compared to the northwest European market, where 30,000 tonnes fob ARA cargoes were assessed at a discount of $1/t against front-month Ice gasoil futures.
The substantial discount on gasoil loadings from Dangote is attributed to stricter pricing terms, including upfront payment instead of letters of credit, and payment in dollars instead of the local naira currency.
Aliko Dangote also mentioned to Channels Television that petrol production will commence between 10-15 July.
The absence of gasoline production since Dangote began crude processing in January has led to exports of naphtha, a crucial gasoline blending component, totaling 720,000 tonnes so far, according to Kpler. The refinery is equipped with three straight-run naphtha tanks with a combined capacity of 90,000m³, three hydrotreated heavy naphtha tanks of 90,000m³ in total capacity, and three hydrotreated light naphtha tanks with a combined capacity of 30,000m³, as per sources.