Latest news with #DangotePetroleumRefinery
Business Insider
11 hours ago
- Business
- Business Insider
Dangote's growing reliance on U.S. crude tied to Nigeria's supply failures
Aliko Dangote, President of the Dangote Group, says his refinery is increasingly depending on crude oil imports from the United States due to Nigeria's failure to meet domestic supply commitments. Aliko Dangote states his refinery increasingly relies on U.S. crude imports due to Nigerian supply challenges. Despite being Africa's largest oil producer, Nigeria has struggled to meet domestic crude supply commitments. The Dangote Refinery has diversified its sources, importing crude grades from the U.S., Angola, and Algeria. Despite being Africa's largest oil producer, Nigeria has struggled to consistently provide crude feedstock to the 650,000-barrel-per-day Dangote Petroleum Refinery, forcing it to look abroad to sustain operations. The Dangote Refinery recently hosted Mrs. Maureen Ogbonna, Coordinator of the Technical Committee of the One-Stop Shop for the Sale of Crude and Refined Products in Naira initiative, during an official visit to the facility. Ogbonna, who led a delegation to the refinery, described it as ' a breath of fresh air ' with a transformative impact across virtually every sector of the Nigerian economy. While applauding the technical committee's role in supporting President Bola Tinubu's naira-for-crude initiative, Aliko Dangote praised the policy's positive effect on the economy. He noted that the crude-for-naira swap deal has helped lower petroleum product prices, reduced pressure on the U.S. dollar, and contributed to stabilizing the local currency. However, Dangote acknowledged that due to ongoing shortages of domestic crude oil, the refinery has increasingly had to rely on imports from the United States in recent months to sustain operations. As a result, U.S. suppliers have become a key fallback, highlighting both Nigeria's supply gaps and the growing role of international markets in sustaining one of Africa's largest energy investments. Dangote's dependence on foreign crude According to the National Bureau of Statistics (NBS), Nigeria spent ₦1.19 trillion on crude oil imports in the first quarter of 2025, making it the country's third most imported commodity during the period—despite being Africa's top oil producer. The contradiction highlights persistent supply gaps to local refineries, especially the Dangote Petroleum Refinery. Findings show that the Dangote Refinery is projected to import 17.65 million barrels of crude oil between April and July 2025, beginning with about 3.65 million barrels already delivered over the past two months, amid ongoing allocations under the Federal Government's naira-for-crude policy. As of March 2025, the refinery had received over three million barrels of U.S. crude in a single month, according to Bloomberg. Beyond American crude, the refinery has diversified its sources by importing Angola's Pazflor grade and Algeria's Saharan Blend, both supplied by Glencore Plc.
Business Insider
3 days ago
- Business
- Business Insider
Fears of a Dangote monopoly spurs backlash against his fuel distribution plan
The Dangote Petroleum Refinery announced a bold plan to deliver fuel directly to Nigerian gas stations on August 15, 2025, which could revolutionize the nation's downstream petroleum industry. The Dangote Petroleum Refinery plans to directly supply fuel to Nigerian gas stations starting August 15, 2025. The initiative includes complimentary logistics, impacting customers like fuel marketers, manufacturers, and more. The Products Retail Outlets Owners Association (PETROAN) opposes the move, citing market destabilization risks. With free logistics provided as a sweetener to improve distribution, the company declared that it would start supplying Premium Motor Spirit (PMS) and diesel to a broad spectrum of customers, including fuel marketers, gasoline dealers, manufacturers, telecom companies, aviation companies, and other large users. However, the industry's biggest players have swiftly criticized and opposed what was seen as a game-changer. The Products Retail Outlets Owners Association (PETROAN), which represents the interests of retail fuel businesses across the country, has publicly opposed the proposal, as reported by the Punch. The organization claims that Dangote's desire to function as both a producer and a distributor of petroleum products is an overreach that might destabilize the sector and result in significant job losses. What PETROAN said 'The company may leverage its market power to fix prices, limit competition, and exploit consumers, much like it has done in other sectors,' the group disclosed via a statement. 'This could lead to a massive shutdown of filling stations across Nigeria, resulting in widespread job losses. The introduction of 4,000 brand-new Compressed Natural Gas-powered tankers by the Dangote refinery poses a significant threat to the livelihoods of thousands of truck drivers and owners,' the statement added. This is not the first time that concerns have been voiced about the refinery's expanding impact. PETROAN cited similar tendencies in other industries where Dangote Group has a significant presence, accusing the conglomerate of abusing its enormous market clout to dominate and suppress competition. There have been claims that allowing Dangote to dominate both refining and retailing risks distorting pricing processes and reducing transparency in Nigeria's petroleum industry, which is already plagued by inefficiency, opacity, and regional inequities. PETROAN is now urging the Nigerian government to intervene and regulate the refinery's role in fuel distribution to prevent market exploitation and maintain a level playing field. 'It is obvious that Dangote plans to gain full monopoly of the downstream sector, which would enable the company to exploit Nigeria's petroleum consumers. This could lead to higher prices, reduced competition, and decreased economic efficiency.
Business Insider
5 days ago
- Business
- Business Insider
Dangote refinery to kick off nationwide fuel distribution
Dangote Petroleum Refinery has announced a major fuel distribution initiative set to begin on August 15, 2025, aimed at transforming Nigeria's downstream petroleum sector. Dangote Petroleum Refinery announced a fuel distribution initiative starting August 15, 2025. The program aims to supply PMS and diesel across Nigeria to various sectors, including energy and aviation. To remove logistical challenges, the company will provide complementary logistics support to buyers. Dangote Petroleum Refinery has announced a major fuel distribution initiative set to begin on August 15, 2025, aimed at transforming Nigeria's downstream petroleum sector. 'Effective 15th of August 2025, the Refinery will begin the distribution of Premium Motor Spirit (PMS) and diesel to marketers, petrol dealers, manufacturers, telecoms firms, aviation, and other large users across the country, with free logistics to boost the distribution network,' the refinery said in a statement on X. To eliminate logistics bottlenecks and reduce distribution costs, the company offers free logistics support to fuel purchasers as part of the programme. This move is expected to significantly lower fuel costs, especially for key sectors, and ease inflationary pressure. To support the smooth rollout, Dangote Refinery has invested in 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers. The company is also building CNG refuelling infrastructure across the country, supported by a fleet of over 100 additional CNG tankers to ensure seamless product movement. Credit support for high-volume purchases The refinery, the world's largest single-train refinery, also announced a credit facility for high-volume buyers. Those purchasing a minimum of 500,000 litres will qualify to receive an additional 500,000 litres on credit for two weeks, backed by a bank guarantee. In a statement released by the company, Dangote Refinery described the initiative as a 'strategic programme' aligned with its commitment to enhancing energy efficiency, promoting sustainability, and driving inclusive economic growth.
Business Insider
07-06-2025
- Business
- Business Insider
AFC names Nigeria, Angola as front-runners in Africa's energy transformation
Nigeria and Angola are now central to Africa's push for energy security, with the Africa Finance Corporation (AFC) projecting that refining capacity on the continent could meet up to 90% of its fuel demand, almost double from last year's 45%. The Africa Finance Corporation says Nigeria and Angola are critical to Africa's aim for energy security The Dangote Refinery in Nigeria, commissioned in May 2023, is the largest oil refinery in Africa and pivotal for this transformation. Both Nigeria and Angola are highlighted as key players in driving investments and infrastructure for Africa's energy independence. This projection was made in the AFC's newly released 'State of Africa's Infrastructure Report 2025.' The report highlights that if existing and upcoming refineries operate at full capacity, Africa's reliance on imported petroleum products could reduce drastically. Dangote refinery and Nigeria's strategic role The Dangote Refinery in Nigeria is described as the most significant facility leading this transformation. Commissioned in May 2023, it is Africa's largest oil refinery, with a daily processing capacity of 650,000 barrels. Its scale positions it as a crucial tool for reshaping not just Nigeria's, but the continent's energy landscape. Alongside Dangote, the ongoing reactivation of Nigeria's government owned refineries is also expected to play a significant role. In 2023, 55% of Africa's petroleum product demand was met through imports. But the AFC believes that if the continent's full refining potential is realized, this figure could drop to just 10%. Nigeria's infrastructure, if effectively managed and upgraded, will therefore be essential to this reduction. President Bola Ahmed Tinubu has also praised the Dangote Petroleum Refinery, calling it a 'great phenomenon of our time' and a symbol of Nigeria's industrial capacity and economic strength. The investment imperative: brownfield and greenfield projects To reach this potential, the AFC recommends a dual investment strategy. First, about $16 billion is needed to upgrade existing refineries, a move that would improve fuel quality and reduce imports. Second, greenfield projects, such as those in Nigeria and Angola, are key to meeting long-term demand and anchoring future energy independence. These investments must also address challenges in transportation and distribution networks, including pipelines, railways, and port infrastructure. The report emphasizes that any new energy infrastructure must also be resilient enough to support future energy transitions. While Nigeria leads with infrastructure like the Dangote Refinery, Angola is also named by the AFC as a rising hub. Both countries are expected to drive new investment and infrastructure across West and Central Africa, helping the continent achieve fuel security and reduce external dependency. By focusing on both new developments and existing capacity, Nigeria and Angola are positioned to lead Africa's path toward energy independence.
Business Insider
31-05-2025
- Business
- Business Insider
Dangote refinery extends U.S. crude buying spree into July
Dangote oil refinery plans to import at least five million barrels of U.S. West Texas Intermediate (WTI) crude oil in July, according to three trading sources familiar with the matter. The Dangote Refinery plans to import 5 million barrels of U.S. WTI crude oil in July 2023. The refinery has secured its July deliveries through tenders awarded to Vitol, Socar, and Glencore. The refinery's challenges include securing sufficient local crude supplies, supplemented by international imports. Dangote oil refinery plans to import at least five million barrels of U.S. West Texas Intermediate (WTI) crude oil in July, according to three trading sources familiar with the matter. The massive refinery, with a capacity of 650,000 barrels per day, is set to import around 161,000 barrels per day (bpd) of WTI crude in July after awarding tenders in recent days, the sources said. This comes after a record 300,000 bpd was booked in its June tenders. Commodity trader Vitol secured two million barrels for July delivery in the latest Dangote tender, Azerbaijan's state-owned Socar provided another two million barrels, and miner and trader Glencore sold the remaining one million barrels, Reuters reported. The sellers of the nine million barrels Dangote planned to import for June, according to an earlier tender, were not confirmed, as tender details are not publicly disclosed. Africa's largest refinery, the $20 billion Dangote Petroleum Refinery, has been sourcing crude oil from international suppliers to supplement its domestic deliveries as it continues to scale up operations. Dangote's previous record for U.S. crude imports was 173,000 bpd in April, according to data from global shipping analytics firm Kpler. Despite its massive capacity, making it larger than Europe's ten biggest refineries, Dangote Refinery has struggled to secure adequate crude supplies locally. To address this, founder Aliko Dangote announced that the company would source crude from other African-producing nations to maintain production levels. Dangote Petroleum Refinery and the state-owned Nigerian National Petroleum Company Limited (NNPC) have had disagreements, particularly regarding the naira for crude deal. However, in March, NNPC confirmed ongoing negotiations for a new naira-for-crude deal with Dangote Petroleum Refinery.
