DANGOTE REFINERY TIMELINE UPDATE

Dangote Refinery is set to commence petrol refining operations by November 30, 2023, while diesel and jet fuel refining operations will kick off in October 2023, as stated by Dangote Group Executive Director, Devakumar Edwin, in an interview with S&P Global Commodity Insights on September 18.

According to Edwin, the refinery will receive its initial crude cargo within the next two weeks, aiming to produce up to 370,000 barrels per day of diesel and jet fuel starting in October 2023. Subsequently, by November 30, the refinery will initiate a phased increase in petrol production to reach 650,000 barrels per day.

Edwin mentioned that the delay in the timeline was due to the Nigerian National Petroleum Corporation Limited (NNPCL) committing their crude to another entity on a forward basis, causing a temporary shortage. However, he expects the refinery to operate exclusively on Nigerian crude by November 2023. The crude will be purchased in US dollars, not naira, due to the refinery's location in a free zone on the outskirts of Lagos. NNPCL will provide some crude at reduced prices because of its equity stake.

Additionally, Edwin noted that the Dangote refinery can process various African crudes, with the exception of heavy Angolan grades, Middle Eastern Arab Light, and US light tight oil. He anticipates that 50% of the refinery's production will meet Nigeria's requirements, with excess gasoline meeting Euro 5 quality standards being exported to other African markets, the US, and South America. Jet fuel will be exported to Europe, and diesel will be sold in sub-Saharan Africa.

The refinery is expected to benefit Nigeria by providing a stable supply of environmentally friendly refined products and boosting foreign exchange earnings. It will also help alleviate the fuel supply challenges in import-dependent West Africa, where Nigeria's fuel subsidy removal had led to a thriving illicit gasoline market.

Furthermore, the profits from the refinery will be reinvested in further ventures, aligning with Aliko Dangote's focus on Nigeria's economic development.