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NIGERIA’S PETROL IMPORTS HIT 8-YEAR LOW AS DANGOTE REFINERY BOOSTS FUEL INDEPENDENCE

NIGERIA’S PETROL IMPORTS HIT 8-YEAR LOW AS DANGOTE REFINERY BOOSTS FUEL INDEPENDENCE
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Faith Nyasuguta 

Nigeria’s petrol imports have dropped to their lowest level in eight years as the country’s new mega-refinery, the Dangote Refinery, ramps up production, reducing reliance on foreign suppliers. This marks a significant shift in Nigeria’s energy sector, with the refinery poised to transform fuel supply dynamics in West Africa.

According to data compiled by Bloomberg from analytics firm Vortexa Ltd, shipments to Nigeria averaged around 110,000 barrels per day between January 1 and 24. If this trend continues, imports, primarily from Europe, will reach their lowest levels since 2017.

“A large part of the slowdown in Nigeria’s gasoline imports is due to the ramp-up of the Dangote refinery,” said Vortexa analyst Samantha Hartke. She added that Northwest Europe would now need to find alternative markets for its gasoline supplies, given Nigeria’s reduced demand.

The $20.5 billion Dangote Refinery, owned by Africa’s richest man Aliko Dangote, is designed to process 650,000 barrels per day (bpd), making it Africa’s largest refinery. It also surpasses Europe’s ten largest refineries, including the Pernis Refinery, which has a capacity of 404,000 bpd.

For decades, Nigeria,despite being a major oil producer, has relied heavily on imported fuel due to insufficient refining capacity. The completion of the Dangote Refinery is seen as a game-changer, potentially reducing the country’s dependence on foreign fuel and saving billions in import costs.

The Organisation of the Petroleum Exporting Countries (OPEC) has noted that the Dangote Refinery’s growing influence is disrupting the European oil market. The refinery’s ability to meet domestic demand could end the longstanding gasoline trade from Europe to Africa, an industry valued at $17 billion annually.

This shift is already impacting global fuel markets. Stockpiles of gasoline stored in Amsterdam-Rotterdam-Antwerp (ARA), a major hub for European fuel exports to Nigeria, have reached record highs, according to data from Insights Global. With Nigeria importing less fuel, European refiners will likely have to redirect supplies to other markets, potentially affecting fuel prices.

Beyond import reduction, the Dangote Refinery’s full operation is expected to drive fuel affordability and stability in Nigeria, addressing long-standing concerns over supply shortages and price volatility. If the refinery meets its full refining potential, it could position Nigeria as a fuel-exporting nation, reversing decades of fuel import dependency.

Industry experts see this as a turning point for Nigeria’s energy sector, with far-reaching economic benefits, including job creation, increased government revenue, and improved fuel security. However, the refinery still faces challenges, including ensuring consistent crude oil supply and navigating regulatory hurdles.

/Dangote Refinery/

With the Dangote Refinery beginning full-scale operations, Nigeria is taking significant strides toward fuel self-sufficiency, reducing economic pressure from fuel imports, and reshaping global fuel trade dynamics.

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Faith Nyasuguta

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