Dangote Refinery to Reduce West Africa’s Petrol Imports by 290,000 bpd, Sources US Feedstock

The Dangote Refinery, a $19 billion facility located in Lagos, Nigeria, is set to significantly impact West Africa’s fuel supply landscape, potentially reducing petrol imports by 290,000 barrels per day (bpd) by 2026.

This projection comes from S&P Global Commodity Insights, which also noted that the refinery sources its feedstock from the United States.

S&P Global analysts discussed the potential impact of the Dangote Refinery during a panel discussion titled “Exploring West Africa’s Oil Product Flows in a Changing Refining Landscape.”

The analysts agreed that, despite delays, the refinery’s completion will significantly alter the fuels supply landscape in West Africa.

In addition to the refinery’s potential to reduce West Africa’s reliance on petrol imports from Europe, Nigeria has recently imposed stricter regulations on gas oil imports, reducing the maximum sulphur content from 3,000 parts per million to below 500ppm.

This move has led to a significant decrease in gas oil imports from Europe to Nigeria.

The Dangote Refinery is expected to supply significant volumes of gasoline and diesel to the local and regional market, with analysts predicting that West African gasoline imports could drop by as much as 290,000 bpd between 2023 and 2026.

This would make the refinery a dominant supplier in the West African market.

However, the exact timeline for the refinery’s ramp-up remains uncertain, with some analysts suggesting that gasoline production could begin as early as May, while others expect it to start in the fourth quarter of the year.

Once operational, the refinery could also reduce the number of refined products tankers waiting off the coast of West Africa.

The panel discussion highlighted the ongoing changes in the downstream sector, with the Dangote Refinery at the forefront of this transformation.

Other refineries in the region, such as the Port Harcourt and Warri refineries in Nigeria, South Africa’s four major refineries, and new projects in Ghana and Angola, are also contributing to the changing refinery landscape in West Africa.

The Dangote Refinery’s impact on West Africa’s petrol imports and the region’s refining landscape is set to be significant.

As the refinery sources US feedstock and ramps up production, it will likely become a dominant supplier in the sub-region, potentially reducing the reliance on European imports and boosting the local and regional economy.