Dangote Refinery Increases Gasoil Exports to West Africa, Affecting European Market Share


LAGOS, July 1 – Nigeria’s Dangote oil refinery is ramping up gasoil exports to West Africa, cutting into European refiners’ market share, as reported by traders and shipping data.

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The $20 billion refinery, developed by Africa’s wealthiest man Aliko Dangote near Lagos, is producing a lower grade of gasoil due to pending restarts of units required for cleaner fuel production. Consequently, the refinery is targeting buyers in neighboring markets.

In May, gasoil exports from Dangote’s refinery surged to nearly 100,000 barrels per day (bpd), almost doubling April’s levels, according to analytics firm Kpler. Most of these exports went to other West African countries, with one cargo reaching Spain.

Preliminary June data indicates a sharp decline in gasoil volumes, although overall oil product exports, including fuel oil, naphtha, and jet fuel, remained relatively high at 225,000 bpd.

The refinery has significantly altered the supply dynamics in West Africa, impacting European markets. EU and UK gasoil exports to West Africa dropped to a four-year low of 29,000 bpd in May, while Russian exports fell to an eight-month low of 87,000 bpd.

Dangote has also sold high-sulfur gasoil to the Nigerian market, but this has led to disputes with local fuel retailers over the sale of dirtier fuel.

Nigeria’s 2021 oil law mandates a 50 parts per million (ppm) sulfur content, aligning with ECOWAS standards. However, regulators permitted gasoil with up to 200 ppm sulfur to be sold locally until June to allow time for compliance.

With European countries tightening regulations on high-sulfur gasoil exports, Dangote’s cargoes are finding markets with less stringent fuel standards.

A trading source indicated the refinery has been producing gasoil with sulfur content between 800-1,300 ppm, well above the 200 ppm limit. However, the company aims to achieve 10 ppm gasoil soon.

“We have commissioned the equipment and it would be done within two weeks,” said Davakumar Edwin, an executive at Dangote Refinery. The company stated they are gradually working towards meeting the new standard.

Adeniyi Ogunfowoke, The Naija247news
Adeniyi Ogunfowoke, The Naija247newshttps://naija247news.com/
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