Dangote oil refinery will process up to 400,000 barrels of crude per day over the next two months and is set to reach full capacity soon.
A cargo allocation list seen by Bloomberg shows that the 650,000-metric-ton refinery near Lagos is scheduled to receive around 24 million barrels of crude in October and November, marking a shift toward greater use of domestic supply.
Ronan Hodgson, a London-based analyst at FGE, told Bloomberg that the increased demand from Dangote could significantly tighten the West African crude market in the fourth quarter.
Hodgson noted that this could push Nigeria’s crude exports below one million barrels per day due to the refinery’s substantial intake.
However, Bloomberg also reported that some of these shipments may face delays, with October’s schedule including two cargoes initially postponed from September. Despite this, the volume slated for the coming months is notably higher than the refinery’s average intake of 255,000 barrels per day in the first half (H1) of the year, as Dangote gradually scaled up its operations.
The massive refinery is currently operating at 60-70 person capacity, with expectations to reach full capacity within months, according to Vartika Shukla, chairman of Engineers India Limited, the project management firm overseeing the facility.
The latest allocations also suggest a reduction in Dangote’s purchases of US crude, traders said.
Earlier in the year, the refinery had imported millions of barrels of West Texas Intermediate (WTI) Midland crude but later re-sold some and halted plans for further acquisitions.
In a deal reached last month, Nigerian National Petroleum (NNPC) Limited agreed to supply crude to the refinery in exchange for exclusive rights to distribute the gasoline it produces.
Experts note that if Dangote continues to increase its processing rates, Nigeria may be closer to achieving its long-anticipated goal of reducing expensive imports of refined oil products.
“As the refinery boosts production, the need for gasoline and diesel imports in West Africa will diminish rapidly,” Hodgson said.
Meanwhile, the NNPC is ending its exclusive purchasing deal with Dangote Refinery, paving the way for other fuel marketers to source petrol directly from the facility.
Sources with knowledge of the matter told Premium Times that NNPC will no longer act as the sole off-taker, a move designed to promote competition and improve supply chain stability.
Marketers can now negotiate prices directly with Dangote Refinery based on market conditions, rather than relying on NNPC as the intermediary.
An NNPC official confirmed the development to Premium Times on Monday, saying, “Yes, it is true. We can no longer continue to bear that burden.”
When the Dangote Petroleum Refinery began processing petrol in September, only NNPC was permitted to purchase and resell to marketers for distribution. NNPC announced it would buy petrol from the refinery at N898.78 per liter and sell it to marketers at N765.99 per liter, absorbing a subsidy of nearly N133 per liter.
