Nigeria's Dangote Refinery Begins Gasoline Production After Delays
TLDR
- Dangote's new oil refinery near Lagos has commenced storing and distributing gasoline, with a capacity of 650,000 barrels/day primarily for gasoline.
- This milestone alleviates Nigeria's fuel supply challenges as state oil importer faces disruptions due to debt and pricing issues.
- The refinery is set to gradually increase production from 90,000 barrels/day in Q4 to 250,000 barrels/day by mid-2025.
Nigeria's new Dangote oil refinery has started filling tanks with gasoline, marking a significant milestone for the country. The refinery, located near Lagos, is reportedly set to begin distributing gasoline by the weekend.
When fully operational, the refinery will have the capacity to process 650,000 barrels of oil per day, with over half of that output being gasoline. The ramp-up comes at a critical time as Nigeria's state oil company, the main importer of fuel, struggles with supply disruptions due to debt and rising prices.
At full capacity, the facility is expected to produce 330,000 barrels per day of gasoline. Full production levels are not expected immediately, with output projected to start at around 90,000 barrels per day in the fourth quarter, increasing to 250,000 barrels by mid-2025.
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Key Takeaways
The Dangote refinery's initiation of gasoline production signals a transformative moment for Nigeria and the broader sub-Saharan African fuel market. The new refinery has the potential to reshape regional fuel markets and reduce Nigeria’s dependency on gasoline imports, which totaled around 250,000 barrels per day last year and have been crucial to meeting domestic demand. This shift is poised to alter established trade routes and impact global fuel markets, with millions of barrels of gasoline that would have been shipped to Nigeria now needing new destinations. The refinery’s progress comes after years of delays and skepticism, but with gasoline production now imminent, the project is positioned to meet and potentially exceed Nigeria’s fuel needs, as well as contribute to the broader sub-Saharan African market.
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