The Dangote Refinery has begun exporting its jet fuel to international destinations, including Iceland, Tenerife, and London’s Heathrow Airport. This marks a major milestone for the Nigerian facility as it scales up production and penetrates global markets.
Expanding Export Reach
Between January and October 2024, the refinery’s supply predominantly served the Lome transshipment hub off Togo. South Korea has emerged as the largest importer, receiving approximately 23,000 barrels per day (b/d) of naphtha. In addition, gasoil shipments have been sent to Ghana and other West African countries, showcasing the refinery’s growing impact on the regional energy market.
Estimates indicate that at least eight African nations are preparing to import Dangote Refinery products as the facility reaches full operational capacity next year.
Positioning Nigeria as an Export Leader
The refinery’s operations have established Nigeria as a net exporter of jet fuel, naphtha, and fuel oil, according to SP Global Commodity Insights. Projections suggest that by next year, Nigeria could export 50,000 b/d more gasoil than it imports, with this figure potentially tripling by 2026.
Petrol Exports and Domestic Implications
Although the refinery was initially focused on reducing Nigeria’s dependence on imported fuel, it is exploring petrol export markets amid rising domestic fuel prices. Currently, Nigeria’s state oil firm, NNPC, sources about 350,000 b/d of petrol through imports. However, in November, NNPC announced plans to shift exclusively to domestic supplies.
As Dangote Refinery’s catalytic cracking unit scales up, petrol production is estimated at 50,000 b/d. Despite limited domestic output, the company has agreed to export 200,000 metric tons of petrol, a move that could strain local supply and spark political debate.
Quality and Regulatory Shifts
Improvements in fuel quality from the Dangote Refinery have prompted Nigeria’s fuel regulator to restrict low-quality imports, leading to higher prices for consumers. Following the subsidy removal in May 2023, petrol imports dropped over 40% year-on-year, partly due to reduced fuel smuggling.
Impact on Global Refining Margins
The refinery’s growing exports are expected to disrupt global markets. Forecasts indicate that Northwest Europe’s petrol margins may decline from over $20 per barrel in early 2024 to about $7 per barrel by early 2025. As Dangote continues to seek international buyers, these shifts could have far-reaching economic implications.
Conclusion
With its $20 billion facility, Dangote Refinery is redefining Nigeria’s role in the global energy landscape. From jet fuel to gasoil and petrol, the refinery’s exports are reshaping market dynamics while positioning Nigeria as a major player in the energy sector.