Dangote Oil Refinery, Africa’s largest, is set to revolutionize the region’s import and export markets by processing up to 400,000 barrels of Nigerian crude daily over the next two months, according to a cargo allocation list seen by Bloomberg News.
This significant development is expected to substantially tighten the West African crude market, potentially reducing Nigeria’s crude exports below one million barrels a day, according to Ronan Hodgson, a London-based analyst at FGE.
The refinery, located outside Lagos, will receive approximately 24 million barrels of Nigerian supply in October and November, marking a major shift towards local feedstock. This move is expected to curb Nigeria’s costly oil product imports, a long-held goal for the country. “If the refinery runs at higher rates, the West African market for gasoline and diesel imports will shrink extremely quickly,” Hodgson noted.
Meanwhile, the Nigerian government and Dangote Refinery have agreed to transact in local currency, with Nigerian National Petroleum Company (NNPC) supplying 385,000 barrels of crude oil to the refinery starting October 1, 2024. The refinery will, in turn, supply gas and diesel to the domestic market, payable in naira.
As Dangote Refinery ramps up production, Nigeria’s economy is expected to benefit significantly, with potential GDP growth of over $400 billion by 2030.
—Ezinwanne Onwuka reports for TruthNigeria from Abuja.
