By Milcah Tanimu
The anticipated launch of petrol production by the Dangote Petroleum Refinery faces further delays, potentially pushing back its initial schedule. Alhaji Aliko Dangote, President of Dangote Group, had previously projected that the refinery would start producing petrol between August 10 and 12, 2024. However, recent reports suggest that the facility may not meet this deadline.
Sources close to the refinery have confirmed that while preparations for petrol production are nearly complete, a persistent crude supply crisis is complicating the timeline. The refinery is set to commence production before the end of August, but the challenge of maintaining a continuous crude supply remains a critical issue.
The refinery, with a capacity of 650,000 barrels per day, is awaiting 29 million barrels of crude oil from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). The delay in receiving this crude is exacerbated by the ongoing shortage, which affects the refinery’s ability to commence and sustain petrol production.
Although the Dangote refinery is poised to start producing petrol this month, the low supply of crude oil may impact its ability to deliver the product to the market as initially planned. The refinery’s spokesperson has confirmed readiness to begin production but highlighted that the low supply could affect the process.
Further complicating matters, experts and local marketers are concerned about the competitive pricing of petrol. The refinery, which sources crude at international rates, faces challenges selling petrol domestically at competitive prices due to price differentials. This may lead to potential difficulties in local sales compared to international markets.
The Dangote Group has also engaged in disputes with the NUPRC over crude oil allocations, with claims and counterclaims regarding the supply of 29 million barrels. The NUPRC maintains that it has facilitated the delivery of significant crude volumes, while Dangote Group disputes this, citing inadequate local crude supply.
Petroleum marketers in Nigeria are currently awaiting updates on when Dangote refinery will start supplying petrol. Many have been dependent on the Nigerian National Petroleum Company Limited (NNPCL) for petrol, while sourcing other products like diesel and aviation fuel from the Dangote refinery.
As August progresses, the uncertainty surrounding the refinery’s ability to deliver petrol continues to raise concerns among Nigerians, who had anticipated the refinery would address the country’s fuel importation issues. The ongoing crude supply crisis and associated delays are seen as significant hurdles to the refinery’s operational goals.