The Dangote Refinery, considered a transformative development for Nigeria and sub-Saharan Africa, is set to receive its initial shipment of crude within the next two weeks. According to Devakumar Edwin, Dangote Group Executive Director overseeing the $19.5 billion refinery, production will commence in October with an estimated daily output of 370,000 barrels per day (bpd) of diesel and jet fuel. The launch will occur in phases starting with diesel and jet fuel production by October followed by petrol production ramping up gradually until it reaches approximately half the total projected output of 650,000 bpd expected around November 30th.
S&P Global analysts predict that despite recent delays pushing back full operating capacity until mid-2025 or later; Nigerian petrol production should still exceed imports until at least the year 2040 due to this new refinery's contribution. Although originally designed specifically for processing light sweet Nigerian crude oil; state-owned Nigerian National Petroleum Company (NNPC), which is also a shareholder in this project alongside Dangote Group among others cannot supply their share of crude oil until November this year so trading houses like Vitol and Trafigura are being used as temporary suppliers instead.
Edwin clarified that while some reports may have suggested otherwise; all purchases made by Dangote Refinery from NNPC would be made using US dollars rather than naira because it operates from a free zone outside Lagos city limits. However he added that NNPC has agreed to provide some discounted pricing on their equity stake which helps offset costs somewhat.
Given its size and scope Edwin noted that relying exclusively on Nigerian crude was not ideal hence why other African crudes could also be processed but heavy Angolan grades were unsuitable along with many Russian grades unless global trade conditions improved significantly first before they could consider them viable options.
In conclusion Edwin believes such a massive investment into refining facilities will have enormous benefits for Nigeria including providing environmentally friendly refined products domestically while generating significant foreign exchange earnings plus alleviating regional fuel supply shortages especially since West Africa had recently abolished gasoline subsidies leading to price fluctuations causing an illicit black market demand spike.