Dangote Refinery Speaks on Fuel Supply, Warns of Export if Crude Shortage Persists
- Dangote refinery says it will supply Nigerians with fuel if crude oil is made available
- Demand for diesel and aviation fuel is currently outpacing supply at the refinery
- Rising fuel costs are expected to impact businesses and inflation nationwide
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology, and macroeconomic trends in Nigeria.
The Dangote Petroleum Refinery has said it will continue to supply fuel to Nigerians but warned that adequate access to crude oil is critical to sustaining local distribution, according to company officials.
The refinery noted that it may be forced to export refined products if it continues to rely on imported crude for its operations, PUNCH reported.
Source: Getty Images
Crude supply key to local fuel availability
President of the Dangote Group, Aliko Dangote, disclosed in an interview with Al Jazeera that the facility is experiencing strong demand for refined products.
He said the refinery is nearly out of aviation fuel and diesel, while petrol remains in surplus.
A senior official of the company, who spoke on condition of anonymity, assured that Nigeria would not face shortages as long as crude supply is sustained.
“We will not starve Nigeria, as long as they keep giving us crude,” the official told PUNCH.
Talks ongoing with oil producers
The official confirmed that discussions are ongoing with the Nigerian National Petroleum Company (NNPC) Limited and other oil producers over supply concerns.
The refinery had earlier complained of receiving less than five million barrels of crude monthly, far below its requirement of 19.7 million barrels.
It warned that importing crude would make it economically necessary to export refined products instead of selling locally.
Rising demand across Africa and beyond
Global supply disruptions linked to tensions in the Middle East have increased demand for fuel from the 650,000-barrels-per-day refinery located in Lekki, Lagos.
The facility currently produces about 75 million litres of petrol, 25 million litres of diesel, and 20 million litres of aviation fuel daily.
It recently exported 12 cargoes of fuel, totalling 456,000 tonnes, to countries including Côte d’Ivoire, Cameroon, Ghana, Tanzania, and Togo.
According to reports by Al Jazeera, buyers from Europe, Asia, and South America are also seeking supplies from the refinery.
Meanwhile, the refinery’s Chief Executive Officer, David Bird, said during an interview on Arise News that the company is increasingly forced to purchase Nigerian crude from international markets at higher prices.
He explained that the refinery currently receives only five cargoes monthly under the Federal Government’s naira-for-crude arrangement, instead of the expected 13 to 15 cargoes.
Diesel prices surge amid global tensions
Separately, Nigeria has recorded one of the sharpest increases in diesel prices globally, according to data from InvestorSight.
The report shows that diesel prices in Nigeria have risen by 78.3 per cent since the outbreak of tensions linked to Iran, ranking second globally behind the Philippines.
The increase surpasses those recorded in countries such as the United States, Germany, and the United Kingdom.
Diesel prices in Nigeria have climbed from about N900 per litre to N1,600, driven by the ongoing crisis, which began on February 28.
Source: UGC
FG must ensure steady crude supply to local refineries - Expert
The National Publicity Secretary of the Crude Oil Refineries Association of Nigeria (CORAN), Eche Idoko, said the government must shield Nigerians from the volatility of the global oil market by ensuring that local refineries in the country have access to a steady crude supply.
Idoko pointed out that rising crude prices globally are already pushing up production costs for local refineries, and consequently driving up retail prices of petrol and other refined petroleum products in Nigeria.
He told Legit.ng that domestic refineries, including the Dangote Refinery, should not have to import crude oil when Nigeria produces more than enough.
“The current global oil price surge should serve as a clear signal: Nigeria must prioritise its domestic refining ecosystem by ensuring that local refineries are sufficiently supplied with local crude under fair and transparent terms.
“Only then can the country begin to insulate its downstream sector from global volatility, stabilise product prices, and fully realise the strategic benefits of its hydrocarbon resources,” he argued.
The Energy expert urged the federal government to increase the volume of crude oil made available to local refiners and make it possible for them to buy feedstock in Naira rather than dollars.
He argued that adequate and predictable supplies are essential to improving refinery utilisation and reducing dependence on foreign sources for energy security.
Petrol marketers urge FG to introduce relief measures for Nigerians
Legit.ng earlier reported that petrol marketers have asked the government to introduce temporary measures to ease the hardship caused by rising petrol prices.
The marketers under the aegis of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) said higher fuel costs are increasing transport fares and the cost of goods.
The group also called for food subsidies and the adoption of alternative energy sources like CNG.
Source: Legit.ng
