Dangote confirms to start petrol production this July

Vice President of Oil and Gas, Dangote Industries Limited (DIL), Devakumar Edwin, has reiterated the company’s promise that it will commence production of premium motor spirit (PMS), this month (July).

Devakumar reiterated the pledge while speaking to media persons during a visit by officials of international financial analysis firm, S&P Global, to the Dangote Refinery in Ibeju-Lekki, Lagos as part of an assessment of Nigeria’s sovereign credit rating.

The team from the international rating agency was accompanied by officials from the Federal Ministry of Finance.

Devakumar, who led the team during the tour of the facility, reiterated that by leveraging Africa’s abundant crude oil resources to produce refined products locally, the company aims to catalyze a virtuous cycle of industrial development, job creation and economic prosperity.

Noting that the products from the $20 billion facility are of high quality and meet international standards, Edwin said the facility can meet 100 percent of Nigeria’s demand for gasoline, diesel, kerosene and jet fuel, with surplus available for export.

Currently operating at 350,000 barrels per day, Edwin said the refinery is scheduled to be upgraded to at least 500,000 barrels per day in July/August, starting refining ultra-low sulfur gasoline and diesel.

He noted that the refinery, which is designed to process a wide range of crude oils including a range of African and Middle Eastern crudes, as well as US Light Oil, complies with Euro V specifications. In addition, the refinery is designed to comply with US EPA, European Union (EU) emission norms, Department of Petroleum Resources (DPR) emission/effluent norms, and African Refiners and Distribution Association (ARDA) standards.

Noting that most refineries were built by foreign companies, he said it was a matter of pride that a Nigerian company designed and built the world’s largest single-rail refinery complex while acting directly as its own Engineering, Procurement, and Construction (EPC) contractor. The refinery also has a standalone marine facility capable of handling the world’s largest vessels.

S&P Global assessed that the 650,000 barrels per day (bpd) Dangote Oil Refinery and Petrochemicals Company is capable of addressing Nigeria’s foreign exchange (forex) issues and its heavy pressure on the local currency Naira, while catalyzing the country’s economic development.

S&P noted that the world’s largest single-train refinery complex would strengthen Nigeria’s oil sector and, more importantly, also have a positive impact on its economic growth.

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Director and Principal Analyst, Sovereign and International Public Finance Ratings, S&P Global Ratings, Ravi Bhatia, who led the delegation to Lagos, said the Dangote refinery will transform Nigeria into a net exporter of petroleum products. He added that the transformation is expected to boost revenue generation and ease the current pressure on the country’s foreign exchange reserves.

“This is a very impressive facility, capable of processing 650,000 barrels per day, at full capacity. It is the largest single refinery complex in the world. It was completed quite quickly. Nigeria is a large crude oil exporter but has problems with importing refined fuels. So, there is a gap in the market where crude oil can be refined in Nigeria, saving money that way, and potentially saving some foreign exchange. It will be positive for the economy in the medium term. It looks positive from our assessment,” Bhatia said after a more than four-hour tour of the facility.

The S&P team commended Dangote Industries Limited President Aliko Dangote for integrating advanced technology and quality control measures, including a state-of-the-art Central Control Unit that ensures smooth automation of operations.

Other members of the international rating agency’s team include Associate Director, Sovereign Ratings, Maxmillian McGraw; Director, Corporate Ratings, Omegu Collocott; Senior Analyst, Bank Ratings, Charlotte Masvongo, and Director, Financial Services, Samira Mensah.

Nigeria, one of the world’s leading oil producers, exports all its crude oil for refining and then imports refined products due to a lack of operational refineries. Nigeria is estimated to import at least 50 million liters of gasoline per day to meet domestic demand.

According to data from the National Bureau of Statistics (NBS) in its Foreign Trade Statistics for the Fourth Quarter of 2023, Nigeria spent about N12 trillion on imports of petroleum products in 2023, including premium motor spirit (PMS), commonly known as petrol. This figure marks an 18.68% increase compared to the N10 trillion spent on fuel imports in 2022.

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