Sources Explain Why Dangote Refinery Missed December 2023 Deadline to Begin Sale of its Products

• Sources familiar with the operations of the industry have explained the reason Dangote Refinery delayed selling its product
• The sources said unfinished business with regulatory permits was the major reason Nigerians are yet to receive the product in the market
• The revelation came after the largest African refinery failed to start production one week after its earlier promised date

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

Sources have said the Dangote Petrochemical Refinery's intention to put diesel and aviation fuel (Jet A1) into the Nigerian market in January was delayed by unfinished business with regulatory permits.

The management of the biggest refinery in Africa earlier set a deadline of January 31 for the refinery to start selling its petroleum product on the local market.

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However, the refinery is still grappling with various regulatory approvals one week after the deadline for the refinery to commence selling its petroleum products on the local market.

This occurred over a month after the refinery commenced the production of petroleum products at the large plant.

Why Dangote is yet to hit market

According to multiple sources at the Nigerian Midstream and Downstream Petroleum Authority's (NMDPRA) in Abuja headquarters and Lagos regional office, the process for releasing regulatory clearances is still underway.

An official, who pleaded not to be named due to lack of authorisation, stated:

“Definitely, before any release of products is made, approvals must have been granted, and this is being worked on. The appropriate department is working out the approvals.

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“We cannot tell you precisely what these approvals consist of. But the fact is that for Dangote refinery to release products, the requisite approvals must be granted because the regulator needs to look at the quality of the products, whether they (products) meet specifications, etc. before they are released to the market.

“So the approvals are being worked on. However, I cannot give you the date when it is going to be completed, but just know that the process is ongoing, and I’ll brief you on an updated position.”

In addition, oil marketers emphasized to The Punch that they were still awaiting the contractual terms for the facility's product supply, as these terms had not been provided yet.

Charles Abuede, a financial analyst said that the commencement of operations at refineries could potentially contribute to a reduction in fuel prices, as increased local refining capacity may lessen dependence on imported refined products; hence, increased supply or product availability will likely temper on price.

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He added,

"However, the actual impact on prices will depend on various factors, including production costs, market dynamics, and government policies regulating fuel pricing."

Dangote Refinery makes list of largest refineries

Legit.ng also reported that Dangote Refinery, producing 650,000 barrels of crude oil per day, has been ranked among the top eight largest refineries in the world.

This is according to data put together by NS Energy and SK Energy data.

Oil refineries utilise an industrial process to convert crude oil into refined products, including jet fuel, kerosene, gasoline, diesel, and liquefied petroleum gas.

Source: Legit.ng