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A recent report by S&P Global has revealed that the Dangote Petrochemical Refinery is now meeting up to 60% of Nigeria’s domestic gasoline demand. This development highlights the refinery’s growing role in stabilising the country’s fuel supply and reducing dependence on imports.

According to the report, the refinery’s gasoline output has been steadily increasing since its startup in January 2024. In late January, a Dangote Group executive disclosed that the refinery was producing over 30 million litres/day of gasoline, with the site surpassing 85% utilisation.

“They are importing a lot less, and traders are making up the shortfall from offshore Lome,” said a trader, referring to the nearby transshipment hub off the coast of Togo.

Ikemesit Effiong, partner at Lagos-based SBM Intelligence, noted that the Dangote refinery was primarily responsible for the decline in imports. “They’re supplying the market at frankly (pleasantly) surprising volumes,” he said.

However, some traders have expressed doubts about the refinery’s actual production volumes, citing opaque output data. Rasool Barouni, head of refining at Commodity Insights, warned that the refinery is still exposed to disruptions, particularly within the first years of its ramp-up.

“Operating a large Residue Fluid Catalytic Cracking unit presents significant challenges,” Barouni said. “Dangote’s RFCC requires a substantial amount of fresh FCC catalysts and additives while also producing a considerable volume of spent catalyst.”

The report also highlights logistical constraints that could pose potential bottlenecks for the site in the future. Traders have noted that the refinery has limited capacity to boost its road freight, relying on a mixture of trucks and intra-Nigerian cargo deliveries.

Despite these challenges, the Dangote refinery appears to be on the cusp of dominating the domestic market. “There are still volumes coming from Europe, of course, but something like 50 to 80% of the exports are gone,” said a Northwest European trader.

The significant reduction in European imports has led to a shift in trading patterns. “They’re not buying as much from us, and we’re having to look for other markets,” said another European trader.

Meanwhile, Nigerian traders are benefiting from the increased domestic supply. “We’re getting more products from Dangote, and it’s helping us to meet demand,” said a Nigerian trader.

However, some traders have expressed concerns about the refinery’s ability to sustain its current production levels. “It’s still early days, and we need to see if they can maintain this level of production,” said a trader.

Despite these concerns, the Dangote refinery’s impact on the Nigerian market is undeniable. “It’s a game-changer for Nigeria,” said Ikemesit Effiong, partner at Lagos-based SBM Intelligence. “The refinery is helping to reduce dependence on imports and stabilise the fuel supply.”

As the refinery continues to ramp up production, it is expected to have a significant impact on the Nigerian economy. “It’s a major boost for the economy, and it will help to create jobs and stimulate growth,” said Rasool Barouni, head of refining at Commodity Insights.

In conclusion, the Dangote Petrochemical Refinery is playing a crucial role in meeting Nigeria’s gasoline demand, reducing dependence on imports, and stabilizing the fuel supply. As the refinery continues to grow and develop, it is expected to have a significant impact on the Nigerian economy and energy sector.

“Dangote’s entry into the market has been a welcome development, and we’re excited to see the impact it will have on the sector,” said a Nigerian energy official.

As the Nigerian energy sector continues to evolve, one thing is clear: the Dangote Petrochemical Refinery is a major player that will shape the future of the industry.

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