Dangote Refinery Begins Petrol Production Test-Run, Port Harcourt Refinery Gets New Date
- The Dangote Refinery is reportedly conducting petrol production test runs in its facility in Lekki, Lagos
- The refinery is scheduled to release petrol into the Nigerian market in September after resolving crude supply bottlenecks
- The Nigerian government has agreed to begin the sale of crude oil to local refineries in naira from October 1
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Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
In anticipation of scheduled petrol production in September, Dangote Refinery is reportedly conducting petrol test runs.
The facility is expected to release petrol into the Nigerian market in September after delays and deadline misses, which it blamed on crude oil supply challenges.
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Dangote refinery agrees with FG on the production date
Reuters reports cited information from industry monitor IIR Energy.
The 6550,000 bpd-capacity refinery, owned by Aliko Dangote, one of Africa’s wealthiest men, has only produced diesel and distillate fuels.
The refinery initially had projected to begin petrol production in May and later shifted the date to July and August.
A recent report says that the $19 billion refinery has agreed to begin production in September.
The report said that IIR noted in its client briefing that further delays are possible. Once production starts, it will significantly alter Europe—Africa fuel trade dynamics and drastically reduce Nigeria’s reliance on petrol imports.
FG to begin crude sales to Dangote in naira
According to reports, the Nigerian government finalised crude oil sales to local naira refineries, including the Dangote Refinery, earlier this month.
The government fixed October 1 as the date to sell crude oil in the local currency to domestic refineries.
The Minister of Finance and Coordinating Minister for Economy, Wale Edun, disclosed this during a meeting with the implementation committee in Abuja last week.
Reports say that Zacch Adedeji, Chairman of the Federal Inland Revenue Service (FIRS), confirmed that the first petrol from the Dangote Refinery is expected in September under the exciting deal.
Expert urges caution on pricing
Nigerians are hopeful that petrol from the Lagos-based refinery will alter prices and ensure continuous supplies as the nation currently battles an acute shortage of the product.
Energy analysts asked Nigerians not to be too hopeful of a drastic price crash, saying that the facility, being a commercial entity, will seek to maximise profits.
“It is a commercial concern and will want to make profits. However, we expect it to drive intense competition as the Port Harcourt refinery will also begin pumping petrol soon.
“What Nigerians should expect is continuous supply as the refinery has assured that Nigeria will be a net exporter of the product,” said Adeola Yusuf, Energy Policy analyst.
He said those expecting N600 per litre of petrol from the refinery may be disappointed, pointing out that the refinery may not replicate what it did with diesel.
Oil producers reject mandate to sell crude to Dangote
Legit.ng earlier reported that in what has been seen as a blow to the Dangote and other local refineries, oil producers have warned against being compelled to sell crude oil to the refineries.
The producers, under the aegis of the Independent Petroleum Producers Group (IPPG), called on the Nigerian National Petroleum Company Limited to re-direct its assigned crude volumes to the local refineries to mitigate the supply shortage experienced by the refiners.
The chairman of IPPG, Abdulrazak Isa, disclosed in a letter dated August 16, 2024, and addressed to the chief executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Ggbenga Komolafe, that the NNPC should use its 445 000 barrels per day intervention crude volume to help the local refineries to meet their targets.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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