Latest news with #DangoteRefinery
Zawya
6 hours ago
- Business
- Zawya
Nigeria: Dangote blames shortage of domestic crude oil for reliance on imports from US
The President of Dangote Group, Alhaji Aliko Dangote, has blamed shortage of domestic crude oil for the major reason Dangote refinery increasingly relied on imports from the United States to meet its needs in recent months. Dangote stated this during the tour of the facility by the Technical Committee of the One-Stop Shop (OSS) for sale of crude and refined products in naira initiative. He applauded the technical committee for its role in supporting the implementation of President Tinubu's laudable Naira-for-Crude initiative. He also commended the positive impact of the naira-for-crude swap deal on the Nigerian economy, noting that it has led to a reduction in petroleum product prices, eased pressure on the dollar, and ensured the stability of the local currency, among others. However, he noted in a statement: 'Due to a shortage of domestic crude oil, the refinery has increasingly relied on imports from the United States to meet its needs in recent months.' He stressed the importance of bold investment in strategic sectors as a key to industrialisation, revealing that building the refinery required extensive infrastructure development, including a world-class, self-sufficient marine facility capable of accommodating the largest vessels globally. He assured the delegation of the refinery's commitment to national development. Designed to process a wide range of crude types, including African and Middle Eastern grades as well as US Light Tight Oil, the refinery has the capacity to meet 100 per cent of Nigeria's domestic demand for petrol, diesel, kerosene and aviation jet fuel, with a surplus available for export. The $20 billion Dangote Petroleum Refinery & Petrochemicals was described as 'a symbol of industrial revolution, driving Nigeria's economic emancipation' by the Technical Committee of the One-Stop Shop (OSS) for sale of crude and refined products in naira initiative during the tour of the facility on Tuesday. Coordinator of the OSS Technical Committee, Mrs Maureen Ogbonna, who led the delegation, described the refinery as a breath of fresh air, impacting virtually every sector of the economy. 'This refinery touches all our lives. There's scarcely any sector unaffected. From pharmaceuticals to construction, food to plastics, this project is transformational. God has used the President of the Dangote Group to liberate Nigeria. I see this as the beginning of an industrial revolution,' she said. Noting that, in line with President Bola Tinubu's vision of achieving full domestic sufficiency in petroleum products and positioning Nigeria as a major global exporter, the committee is committed to eliminating regulatory, operational and logistical barriers that hinder the smooth supply and sale of domestic crude oil and refined products in naira. Reflecting on the scale and sophistication of the facility, Ogbonna, who had visited during construction and more recently alongside the leadership of the Nigerian Ports Authority, expressed continued awe at its execution. 'It is truly mind-blowing that one man could envision and execute such a project. As we toured the refinery, we thought we had seen everything until we reached the laboratory. That lab alone is an institution. I don't know of any institution in Nigeria or even globally that boasts such a laboratory for petrochemical,' she said. Applauding the engineering feat, Ogbonna urged Dangote to remain focused and undeterred by detractors, emphasising that the project is a global achievement, not a personal enterprise. 'We feel truly honoured to have been warmly received by the President of the Dangote Group and his team. My advice to him is: do not be discouraged by critics. He was never self-centred. Despite the obstacles, he was driven by a vision for Nigeria's future, reaching far beyond Africa,' she added. Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (
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.
Russia Today
a day ago
- Business
- Russia Today
Crudely choked: Why must this nation struggle to refine its own oil?
The Dangote Petroleum Refinery in Nigeria, one of the largest oil refineries in the world, with a capacity of over 600,000 barrels per day (accounting for 0.5% of global refining capacity), is well-known beyond Africa thanks to global media reports. Initially, the media discussed this ambitious vision of Africa's richest man, Aliko Dangote, who aimed to tackle the fuel shortage in his home country by building a $20 billion oil refinery. Later, there were reports about construction delays and bureaucratic hurdles; after the refinery was finally launched in May 2023, stories emerged about conflicts between Dangote and the Nigerian government regarding oil and gasoline prices. The refinery's significance has been noted by the Economic Community of West African States (ECOWAS), which has referred to it as a 'beacon of hope' for the struggling regional market. Nigerian President Bola Tinubu, who visited the facility on June 6, called it 'a great phenomenon of our time.' However, the Dangote Refinery also serves as an example of the challenges that many African nations (many of which are not as wealthy as Nigeria) face on their path to economic prosperity, industrialization, and self-sufficiency. Fuel and petroleum products are essential commodities for any economy. They are critical for the operation of transportation infrastructure and energy systems, and play a vital role in industries and construction. Despite the fact that Africa exports at least 4.7 million barrels of oil per day, it still finds itself importing approximately 2.8 million barrels per day, incurring costs of around $100 billion each year. Paradoxically, Nigeria – one of the largest exporters and producers of oil, a member of OPEC and OPEC+ – until recently had been forced to import refined petroleum products (about 500,000 barrels per day). Nigeria's oil refining sector emerged in the 1970s-1980s and had a peak capacity of around 500,000 barrels per day; however, it suffered considerable decline in the 1990s and 2000s due to liberalization and market reforms. Equipment became outdated, and the government spent over a decade unsuccessfully searching for foreign investors to modernize the old refineries. International traders, exporters, trading cartels, and local business associates benefit from keeping countries reliant on imported petroleum products, and reap stable profits from trading margins. The bulk of profits in oil trading comes not just from differences in raw material costs, but also from ancillary operations like hedging, insurance, chartering, transportation, and transshipment. These logistical and financial services form the backbone of global trading business models. This means that the emergence of a domestic refining industry and the launch of oil refineries are detrimental to their interests. Both formal pressure (such as WTO regulations) and informal methods (involving corruption) have been employed to stifle projects aimed at enhancing Africa's domestic oil refining capabilities. Nigeria stands as one of Africa's most developed nations, boasting a population of over 200 million, a growing economy with a robust domestic capital market, and its own billionaires; this allows the country to take the first (even if still unstable) steps toward energy sovereignty. Local businesses, possessing a deeper understanding of African market dynamics, have the potential to drive growth in regional trade and industry. This context sheds light on the construction and launch of Africa's largest oil refinery, owned by Aliko Dangote, the wealthiest person in Africa, whose net worth is estimated at $23 billion. The project is indeed impressive: the Dangote Refinery accounts for about 0.5% of the world's oil refining capacity and over a quarter of all refining capacity in Africa. The project is valued at more than $20 billion and features a high-tech facility equipped with state-of-the-art equipment from around the globe. It produces a wide range of petroleum products, including gasoline, diesel, jet fuel, kerosene, liquefied petroleum gas (LPG), propane, butane, bitumen, naphtha, and fuel oil. This refinery should reduce Nigeria's dependence on imported petroleum products, which cost the nation over $22 billion annually. However, despite being operational for two years, the refinery has faced numerous challenges, particularly pushback from various industry players. In a rather absurd twist, the refinery has been forced to import crude oil from the US instead of sourcing it from local producers. This situation has arisen because multinational corporations like Shell, Chevron, ExxonMobil, and Total, from which the Nigerian National Petroleum Company (NNPC) offtakes crude, prefer exporting crude, since prices are higher in international markets, allowing for greater profit margins. These companies invest in expensive deepwater fields offshore, and export directly to Europe and China. Meanwhile, smaller Nigerian companies operating on less lucrative onshore fields often struggle with technological and financial limitations; this worsens access to crude in the domestic market. Furthermore, for the past two decades, the market has remained rudimentary, with minimal demand for crude due to the lack of local refining capacity. Aliko Dangote's influence has so far enabled him to secure the necessary preferences that benefit the entire domestic market. In 2024, a 'naira-for-crude' deal was introduced, requiring oil producers to sell a portion of their crude oil on the domestic market in naira [the local Nigerian currency]. This measure aims to stabilize the national currency, reduce dollar demand, and foster the growth of the local oil refining sector. Such a model promotes value-added growth within the country, supports import substitution, and could lay the groundwork for an independent fuel sector free from external supply chains. However, this strategy doesn't benefit everyone. The mandatory sale of crude in naira decreases profitability for oil producers, especially multinational companies that rely on foreign currency payments. These tensions led to a temporary suspension of the program, but in April, it was reinstated. A recent visit by a delegation led by President Bola Tinubu to the refinery indicates that some of these conflicts have been resolved. The launch of a major project like the Dangote Refinery creates a cumulative effect that extends well beyond a single industry. It helps build a domestic market not just for petroleum products, but also for crude oil, fundamentally altering the structure of supply and demand within the country. In order to ensure the sustainable utilization of such capacities, the government is reevaluating its economic policies: it is granting meaningful incentives to local businesses, establishing supportive mechanisms like 'naira for crude,' and increasing pressure on foreign investors to redirect a portion of their production to the domestic market. All these efforts contribute to strengthening the naira by lowering demand for foreign currencies, stabilizing the balance of payments, and fostering the development of local production and financial systems, thus strengthening the country's economic sovereignty.
Business Insider
2 days ago
- Business
- Business Insider
Dangote refinery to export first gasoline cargo to Asia
A 90,000 metric ton of gasoline from Dangote refinery is set to be exported out of the West African region for the first time, with the shipment bound for Asia. Dangote Refinery is set to export 90,000 metric tons of gasoline to Asia, marking its first export out of West Africa. Since starting operations, the refinery has expanded its global reach, including shipments to Singapore and Saudi Arabia. The refinery has supplied jet fuel to the United States, exporting approximately 1.7 million barrels to key ports. Dangote refinery is set to export 90,000 metric tons of gasoline to Asia, marking its first gasoline shipment outside West Africa, according to a source familiar with the matter. Since the 650,000 barrel-per-day refinery began exporting gasoline last year, its shipments have remained within West Africa. The trading firm Mercuria is expected to load the cargo on June 22, Reuters reported. Dangote Refinery continues to expand its global footprint, ensuring steady production and solidifying its role as a significant player in the international fuel market. In April, Singapore received a separate shipment of low-sulfur straight-run fuel oil (LSSR) from the refinery, indicating a shift in trade flows toward Asia. LSSR is typically mixed with other fuels to produce low-sulfur fuel oil (LSFO) for bunkering or used as feedstock in various refining processes, further expanding its utility in global energy markets. Dangote's growing influence In addition to Asia, the refinery has made substantial inroads into other markets. For instance, it exported two consignments of jet fuel to Saudi Aramco, the world's largest energy company, highlighting its growing influence in the global energy sector. Furthermore, the refinery has been supplying jet fuel to the United States, with reports indicating shipments of approximately 1.7 million barrels across six vessels to U.S. ports. In January, the Organisation of the Petroleum Exporting Countries (OPEC), said Dangote's oil push in Nigeria is beginning to disrupt the oil market in Europe. Experts revealed that the Dangote refinery might end the decades-long gasoline trade from Europe to Africa, which is valued at $17 billion per year. Last April, the refinery was ranked above Europe's ten largest refineries in capacity.
Reuters
2 days ago
- Business
- Reuters
Nigeria to export first gasoline cargo to Asia from dangote refinery, source says
BRUSSELS, June 18 (Reuters) - A 90,000 metric ton cargo of gasoline from Nigeria's Dangote refinery will be sold out of the region for the first time and bound for Asia, a source familiar with the matter said. Since the 650,000 barrel-per-day refinery started gasoline exports last year, the cargoes have stayed in west Africa. Mercuria is due to load the cargo on June 22, the source said. "We sell our products to those who are willing to give us the highest price. It's the buyer's right to take the products to any destination of their choice," a spokesperson for the Dangote refinery said.
