The Dangote Petroleum Refinery, with a capacity of 650,000 barrels per day, is leveraging cheaper oil imports from the United States for up to a third of its feedstock as it commences production. According to a report by Bloomberg, the refinery has been shipping products in recent weeks while preparing two units to facilitate gasoline output, a move expected to significantly impact Nigeria's fuel market and the wider region, as noted by analysts.

Alan Gelder, Vice President of Refining, Chemicals, and Oil Markets at Wood Mackenzie consultancy, stated, "Dangote is going to influence Atlantic Basin gasoline markets this summer and for the rest of the year." He emphasized the transformative potential of the refinery's operations, particularly with the expected launch of the residue fluid catalytic cracking unit (RFCC), which will upgrade heavier products and disrupt the West African gasoline supply balance.

Despite running at approximately 300,000 barrels per day, nearly half its nameplate capacity, analysts from WoodMac, FGE, and Citac estimate the refinery's operational status. The facility has commenced shipping jet fuel, gasoil, and naphtha, with expectations for the gasoline-focused units to come online this summer, though some analysts project the RFCC startup to extend until the end of the year.

Dangote Industries announced earlier this month that gasoline deliveries would commence in May, but the company spokesperson has not yet responded to inquiries regarding this development. Ronan Hodgson, an energy analyst at FGE, highlighted the refinery's significant impact on product markets even at minimum operating rates, with further enhancements expected as units to improve diesel quality are set to start up in the coming months.

Recent reports indicate that as much as a third of the oil supplied to the Dangote refinery has been US-grade WTI Midland, potentially continuing as long as foreign oil remains more cost-effective than local supplies. However, Nigeria's new regulations aim to compel domestic oil producers to sell crude to domestic refineries, part of efforts to reduce the country's reliance on imported refined products. The government's decision to allow refineries to purchase crude using the local currency, the naira, or the US dollar, underscores ongoing efforts to revamp the domestic refining sector.

Naijamatta is a social networking site,

download Naijamatta from Google play store or visit www.naijamatta.com to register. You can post, comment, do voice and video call, join and open group, go live etc. Join Naijamatta family, the Green app.