The Dangote Oil Refinery is rapidly changing the game in global and local energy markets, according to the latest report from the Organization of the Petroleum Exporting Countries (OPEC).
With its impressive production capacity and high-quality petroleum products, the refinery has begun to disrupt international fuel markets while gaining ground as a preferred supplier to Nigerian consumers.
OPEC, in its latest report, acknowledged that refinery gasoline (oil) exports are already weighing on the European PMS market.
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“Ongoing operational ramp-up efforts at Nigeria’s new Dangote refinery and its gasoline exports to the international market will likely further weigh on the European gasoline market.
“The continued production of gasoline in Nigeria, a country that has relied heavily on imports to meet its domestic fuel needs in the past, will most likely continue to release volumes of gasoline into international markets, requiring new destinations and flow adjustments for additional volumes. in the future,” he said.
This change has reduced European exports to Nigeria, creating challenges for European refiners who now face increased gasoline inventories and bearish market sentiment, particularly during the winter season.
The $20 billion Dangote Refinery, located in Ibeju-Lekki, Lagos State, is the largest oil refinery in Africa and one of the largest in the world. Commissioned in January 2024, the facility has a refining capacity of 650,000 barrels per day (bpd), exceeding the capacities of Europe’s largest refineries. Designed to produce gasoline, diesel, aviation fuel and other derivatives, the refinery integrates cutting-edge technology to meet global standards for product quality and environmental compliance.
The refinery was built to reduce Nigeria’s long-standing dependence on imported fuel, which has not only strained the country’s foreign exchange reserves but also led to supply vulnerabilities and inconsistent product quality. Years of fuel subsidies have further exacerbated the problem, creating a financially unsustainable fuel market. The launch of the Dangote refinery was expected to bring new hope for Nigeria’s energy self-sufficiency.
From its inception, the Dangote refinery was expected to disrupt the international oil market. Its capacity, advanced production processes and strategic location in West Africa make it a formidable competitor to European and Asian refiners.
Nationally, Dangote Refinery is becoming the preferred supplier of petroleum products, both for its competitive prices and high quality production. Nigerian consumers, long accustomed to poor quality imported fuels, are beginning to notice the difference. Positive reviews are pouring in, with many expressing satisfaction with the refinery’s products.
A Nigerian, sharing his experience on social media, said: “The last fuel I bought from MRS has already covered almost 100 km and the tank is still three-quarters full. For a Ford that is normally greedy, this is a big problem. I’m happy and sad at the same time!
This sentiment reflects the growing awareness among Nigerians that locally refined fuel offers better performance and efficiency compared to imported alternatives.
Additionally, the Dangote refinery has significantly reduced Nigeria’s dependence on imported PMS, thereby easing pressure on the country’s foreign exchange reserves. The refinery also contributes to the country’s external trade balance by meeting a substantial part of domestic demand and exporting surplus products. The OPEC report confirmed that during the last quarter of 2024, Nigeria experienced a marked decline in imports of petroleum products, thereby improving its external sector outlook.
Globally, the Dangote refinery now ranks above the largest refineries in Europe. With a capacity of 650,000 b/d, it exceeds the Shell Pernis refinery in the Netherlands (404,000 b/d) and BP Rotterdam (380,000 b/d), among others. This monumental capacity not only places the refinery in a dominant position in the African market, but also demonstrates its potential as a key exporter to markets in Europe, Asia and beyond.
