Nigeria has resumed petrol production for the first time in 28 years with the Dangote refinery in Lagos starting its commercial operations. This facility, with a capacity of 650,000 barrels per day, is expected to ease the severe fuel shortages affecting cities and towns across the country.
Owned by Aliko Dangote, Africa’s wealthiest individual, the refinery has successfully met all certification requirements, marking a major advancement for Nigeria’s energy sector.
The country has spent billions maintaining its existing refineries over the last two decades, yet has struggled to achieve operational success. Nigeria, which consumes approximately 66 million litres of petrol daily, has been investing over $10 billion annually on fuel imports.
The new refinery is set to save billions in foreign currency and improve the local availability of this essential fuel for businesses and households.
In related developments, Africa’s largest oil refinery is nearing the production of significant petrol volumes, with fuel expected to be available as early as this week. This is seen as a transformative moment for the global fuel market, with intensive product testing currently underway.
Situated near Lagos, the refinery will process 650,000 barrels of oil daily, converting more than half into petrol. This development is expected to resolve supply issues in Nigeria, where the state oil company, the primary fuel importer, has faced challenges due to debt and rising costs.
Dangote’s refinery is set to affect billions in fuel trade regionally and globally, as Nigeria remains a major importer, receiving nearly 250,000 barrels daily last year, mainly from Europe, data from Vortexa Ltd shows.
A crucial part of the refinery’s petrol production is a reformer unit that generates blendstock for the fuel. This unit has begun operating, and petrol is expected to be available by the end of this week, according to sources.
When operating at full capacity, the refinery is anticipated to produce about 330,000 barrels of petrol per day, which would cover over 1 percent of the global daily demand for petrol, estimated at around 27 million barrels, according to Randy Hurburun of Energy Aspects Ltd.
The refinery’s output is projected to be significant but still has a way to go, with forecasts indicating about 90,000 barrels per day in the fourth quarter, rising to nearly 250,000 barrels per day by the second half of the next year. Increasing production will depend on the installation of a residue fluid catalytic cracker.
Following years of delays, the refinery has gradually increased its operations and aims to commence petrol production by August, according to its owner. A spokesperson confirmed that the process is progressing as planned.
The refinery has recently started processing petrol after facing setbacks due to crude shortages. This $20 billion facility, which began operations earlier this year with products such as naphtha and jet fuel, is expected to help Nigeria reduce its dependency on imported fuel.
The refinery’s petrol output will be purchased exclusively by the national oil company, which will help address local market shortages exacerbated by its financial difficulties. The arrival of locally produced petrol is anticipated to ease persistent supply issues and improve the situation for consumers.
Despite being Africa’s largest oil producer, Nigeria imports nearly all of its fuel due to long-term neglect of its domestic refineries. Recent data also shows a decrease in global oil production, largely due to supply disruptions in Libya and ongoing reductions by oil-producing nations. This decline, including a significant cut in Libyan output, may lead to an increase in production targets by oil-producing countries in the coming months.
