Faith Nyasuguta
Nigeria’s newly launched Dangote oil refinery is significantly increasing gasoil exports to West Africa, challenging European refiners’ market share, according to traders and shipping data.
Analytics firm Kpler reported that gasoil exports from Dangote refinery surged to nearly 100,000 barrels per day (bpd) in May, almost double the figures from April. Most of these exports were directed to other West African countries, with one cargo sent to Spain.
Preliminary data for June indicates a sharp decline in gasoil volumes, but overall oil product exports, including fuel oil, naphtha, and jet fuel, remained high at 225,000 bpd.
“The refinery has altered the balances in West Africa,” commented a European distillates trading source, noting the impact on European markets.
Kpler data showed that EU and UK gasoil exports to West Africa fell to a four-year low of 29,000 bpd in May, while Russian exports to the region dropped to an eight-month low of 87,000 bpd.
Locally, Dangote has been selling some high-sulphur gasoil but is facing a dispute with local fuel retailers over the sale of this higher-sulphur fuel. Nigeria’s oil law, passed in 2021, mandates a 50 parts per million (ppm) sulphur content, in line with the sub-regional ECOWAS standards adopted in 2020. However, the regulator had permitted gasoil above 200 ppm to be sold locally since the beginning of the year until June to allow local refineries and importers more time to comply with the new standard.
As European nations, including major hubs Belgium and the Netherlands, enforce stricter rules on high-sulphur gasoil exports, cargoes from the Dangote refinery have found a market in regions with more lenient fuel standards.
A trading source familiar with the specifications disclosed that the refinery has been producing and exporting gasoil with 800-1,300 ppm sulphur content, significantly exceeding the 200 ppm limit.
However, the company assured that it is on track to achieve a 10 ppm sulphur content soon. “We have commissioned the equipment, and it will be completed within two weeks,” stated Davakumar Edwin, an executive at the Dangote Refinery. In a statement last week, Dangote reiterated their commitment to gradually meeting the new standard.
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