Dangote Refinery May 2024 Update

Crude Supply

The Dangote Refinery, established by Africa’s richest man, Aliko Dangote, is seeking to purchase at least

24 million barrels of US crude oil

over the next year

The refinery has issued a term tender to buy

two million barrels per month

of West Texas Intermediate Midland crude, starting in July

This move highlights the refinery’s significant role in global crude and fuel trading, positioning it as the largest refinery facility in Africa when fully operational.

Refinery Production

The 650 kb/d Dangote Petroleum Refinery, Africa’s largest, has begun production, starting with

diesel and aviation fuel

This development ends years of anticipation for a plant that could boost local and regional refining capacity in a region heavily reliant on imported refined products.

Challenges

Nigerian crudes are facing competition against American supply, as the Dangote Refinery turns to the US for crude sourcing

The Nigerian government expressed concern about potential local crude oil supply shortfalls for various refineries, including Dangote’s, after their full readiness

The Nigeria Upstream Petroleum Regulatory Commission (NUPRC) has mandated oil companies to prioritize supplying crude to domestic refineries facing difficulties in procuring it locally

The Dangote refinery stands to benefit from this policy by sourcing crude oil from local suppliers rather than relying solely on imports

Markets & Pricing

The Dangote Refinery’s production will have implications for fuel pricing and market dynamics in Nigeria .

The government has declined to set fixed prices for Dangote Refinery products, emphasizing the expansion of Compressed Natural Gas (CNG) usage .

Dangote Refinery May 2024 Update