Dangote Refinery: Expansion to 700,000 bpd will increase control, reduce market shares of foreign competitors 

By Udeme Akpan, Energy Editor

The planned expansion of Dangote Petroleum Refinery by 7.7 per cent to 700,000 barrels per day, bpd, from the current 650,000 bpd, would further increase its dominance of the African market while reducing the market shares of foreign ref

However, checks by Vanguard indicated that the operations of the refineries have already altered the previous flows of petroleum products, mainly from Europe and other markets to Nigeria in particular and Africa in general.

Nigeria, which previously relied heavily on foreign refineries to meet its domestic fuel needs have through the Dangote Petroleum Refinery assisted to meet domestic demand while exporting to other markets around the world.

This shift has affected the European gasoline market, with the Organisation of Petroleum Exporting Countries, OPEC noting that the Dangote Refinery’s production and exports will likely weigh further on the European gasoline market.

The refinery’s production has freed up gasoline volumes in global markets, prompting the need for new destination markets and flow adjustments. This has led to declining petroleum product imports into Nigeria and affected Europe’s gasoline inventory levels.

In a telephone interview with Vanguard, yesterday, Olajide Jeremiah, Chief Executive Officer of Petroleumprice.ng, said: “The Dangoe petroleum Refinery has impacted the domestic and foreign markets around the world with the daily supply of more than 20 million litres in Nigeria and over 30 million litres across some African countries.

“We expect that the markets would be greatly impacted in Nigeria and abroad when the planned 700,000 bpd target is eventually completed.”

Similarly, in another interview with Vanguard, Mr Chinedu Ukadike, Public Relations Officer (PRO) of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said: “Dangote Refinery has made tremendous impact. Petroleum product scarcity has been addressed and the market has become more dynamic than before.

With increase in the capacity of the refinery would increase output, supply and foreign exchange generation for Nigeria. It is a welcomed development.”

On his part, another operator, who pleaded anonymous, said: “Dangote Petroleum Refinery has been exporting petrol, diesel, and aviation fuel to various markets. The refinery’s first gasoline export was to Asia, marking a significant milestone in Nigeria’s transformation from a net importer of refined petroleum to a global exporter.

“The refinery is exporting petrol to countries like Cameroon, Ghana, Angola, and South Africa. Dangote Refinery is shipping diesel and jet fuel to European markets. Much impact would be made with the planned expansion to 700,000 bpd.”

Also, in its report, OPEC noted that the Dangote Refinery, at 650,000 barrels per day, bpd capacity, is 246,00bpd more than Shell’s Pernis refinery in the Netherlands. Also, BP Rotterdam in the Netherlands has 380,000 bpd capacity.

It stated: “The ongoing operational ramp-up efforts at Nigeria’s new Dangote refinery and its gasoline (petrol) exports to the international market will likely weigh further on the European gasoline market.

“Continued gasoline production in Nigeria, a country that has relied heavily on imports to meet its domestic fuel needs in the past, will most likely continue to free up gasoline volumes in international markets, which will call for new destinations and flow adjustments for the extra volumes going forward.”

Recently, Professor Sylvester Akhaine, a Nigerian political scientist, was said to have noted the impact of the Dangote Refinery, adding that its operations are causing disruptions in global oil markets.

According to him, “Oil farms in Aberdeen, in Rotterdam, all of them are laying off workers because of Dangote’s intervention, which for me, is somebody that we ought to celebrate.”

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