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Petrol Imports to Nigeria Plunge in October as Dangote Refinery Increases Output

Published by admin on October 17th, 2024.

Petrol Imports to Nigeria Plunge in October as Dangote Refinery Increases Output

Petrol imports into Nigeria have sharply decreased in October, thanks to a rise in production at the Dangote Refinery aimed at fulfilling local demand.

According to a report from S&P Global Commodity Insights, only 280,400 barrels of premium motor spirit (PMS) were imported in the first week of October, ending on the 6th, through a single Medium Range (MR) vessel. This represents a significant drop from the weekly average of 1.3 million barrels seen in August.

In the week ending October 13, just one product tanker delivered 290,567 barrels of gasoline from Antwerp to Lagos. This marks a stark contrast to the 12 cargoes shipped during the first half of August and September combined. Since October 8, no additional shipments of gasoline have arrived in Nigeria.

This decline in imports signifies a disruption to the established supply route from Northwest Europe to West Africa, driven by the Dangote Refinery’s growing capacity. A trading source noted, “There are currently no scheduled gasoline shipments from Europe to Nigeria. Future supplies will depend on what’s available in the Offshore Lome market,” estimating that the new refinery may only cover about a quarter of domestic demand.

Traders have cautioned that Nigeria might still face a significant fuel shortage without imported supplies.

In a related development, following the sale of crude oil to the Dangote Refinery in Naira, the federal government has permitted petroleum marketers to source petrol directly from the refinery, which has a capacity of 650,000 barrels per day (bpd), bypassing the Nigerian National Petroleum Company (NNPC) Limited. This change signifies a complete deregulation of the downstream sector, ending the previously supported fuel subsidy.

Since September, the Dangote Refinery has begun supplying petroleum products to the market, with initial retail prices ranging from N850 to N900 per litre. However, with the NNPC no longer the exclusive buyer of petrol from the refinery, prices have risen from around N998 to N1,030 per litre.

Once fully operational, the Dangote Refinery plans to meet local fuel needs and export to neighboring African countries and the Caribbean, potentially transforming Nigeria’s petroleum import landscape.