Business

Dangote Refinery Begins Fuel Exports to West African Markets

Published by Tope Fakinlede on November 20th, 2024.

Dangote Refinery Begins Fuel Exports to West African Markets

The Dangote Petroleum Refinery has initiated the export of refined fuel to neighboring West African nations, signaling that the refinery’s operations could soon disrupt regional fuel markets.

A report from Bloomberg on Tuesday, citing data from Vortexa, Kpler, Precise Intelligence, and ship-tracking platforms, revealed that a tanker recently transported a shipment of gasoline from the Dangote refinery to the waters off the coast of Togo. The tanker, identified as CL Jane Austen, loaded over 300,000 barrels of fuel from the refinery before heading westward.

This marks a significant step for the refinery, which has the capacity to process up to 650,000 barrels per day. Last month, Mustapha Abdul-Hamid, chairman of the Ghana National Petroleum Authority (NPA), indicated that Ghana is considering sourcing its petroleum products from Dangote’s refinery. This move would help Ghana reduce its reliance on costlier imports from Europe, which currently amount to approximately $400 million monthly. Abdul-Hamid highlighted that importing from Nigeria, instead of Europe, would eliminate freight costs and lower the prices of goods and services in Ghana.

“If Dangote’s refinery reaches its full capacity, Nigeria alone cannot consume all that production. Importing from Nigeria would be more cost-effective for us than importing from Rotterdam,” Abdul-Hamid said during the OTL Africa Downstream Oil Conference in Lagos.

In addition to Ghana, earlier reports by The PUNCH revealed that Dangote Refinery is in the process of launching fuel exports to South Africa, Angola, and Namibia. Negotiations are also underway with several other African nations, including Niger, Chad, Burkina Faso, and the Central African Republic.

Sources close to the refinery confirmed that talks with Ghana, Angola, Namibia, and South Africa are progressing well, while initial discussions are underway with the other countries.

The shipment currently floating off Togo is being held in an area known for ship-to-ship transfers, raising the possibility that the fuel could be transferred to other destinations. While this shipment is small compared to global gasoline exports, it signals the refinery’s growing production capacity and its potential to export substantial volumes of fuel, potentially reshaping regional fuel markets.

Last month, the Dangote refinery made its first gasoline shipment to Lagos, Nigeria’s commercial hub. However, it remains uncertain whether the refinery will significantly increase its export volumes in the near future.

Additionally, the Nigerian government has ended the monopoly of the state-owned oil company over domestic fuel purchases, although fuel imports from Europe and the U.S. are still allowed under the regulatory framework.

Despite these developments, a spokesperson for Dangote did not respond to requests for comment regarding the latest shipment or future export plans.