Over a year after its launch in May 2023, the Dangote Refinery has successfully rolled out its first batch of Premium Motor Spirit (PMS), commonly known as petrol, from its 650,000 barrels per day facility.
The refinery, owned by billionaire businessman Aliko Dangote, is set to transform Nigeria’s petroleum industry with its state-of-the-art production capabilities.
During a press conference on Tuesday, Dangote expressed his excitement, declaring, “It’s a celebration day for Nigerians.”
He assured the public that the quality of petrol produced at his refinery would be among the best in the world.
“You are now going to have good petrol while the engines of your vehicles will last longer. You will not be having an engine issue, which a lot of us were having. It won’t happen at all,” he said, emphasizing that the quality of the fuel “will match that of anywhere in the world; US, America, we will make sure that nobody will beat us in terms of quality.”
Dangote revealed that once final modalities are agreed upon with the Nigerian National Petroleum Company Limited (NNPCL), the product will be released to the market.
“As soon as we finalise with the NNPCL, our product will start going into the market,” he stated.
The billionaire industrialist highlighted the broader economic impact of the refinery, noting that it would support the revival of industry and manufacturing in Nigeria.
“We will help to restore industry and manufacturing. We will begin real import substitution, which is what we have, you know, saving foreign exchange, earning foreign exchange, which will stabilise the naira, and it will also help bring down inflation and cost of living,” Dangote added.
The Dangote Refinery, which began operations in December 2023 with an initial output of 350,000 barrels per day, aims to reach its full capacity of 650,000 barrels per day by the end of 2024.
Despite initial regulatory hurdles, the refinery has already begun supplying diesel and aviation fuel to local marketers, with petrol now being added to its list of products.
NNPCL’s Debt and Its Impact on Fuel Supply
The rollout of petrol from the Dangote Refinery comes at a time when the NNPCL is grappling with a significant financial crisis.
The state-owned oil company recently admitted to owing substantial debts to petrol suppliers, amounting to $6 billion, which has exacerbated the ongoing fuel scarcity in Nigeria.
This debt burden has severely strained the NNPCL’s ability to maintain a steady fuel supply, a challenge that has persisted since early 2024.
NNPCL spokesperson Olufemi Soneye highlighted the gravity of the situation, stating on Sunday that “this financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply.”
Nigeria, Africa’s most populous nation, continues to face severe energy challenges, with all its state-owned refineries non-operational. As a result, the country remains heavily dependent on imported refined petroleum products, with the NNPCL serving as the primary importer.
The fuel crisis has become a perennial issue in Nigeria, with fuel queues now a common sight across the country.
Since the removal of fuel subsidies in May 2023, the price of petrol has surged from approximately ₦200 per litre to around ₦800 per litre, significantly impacting the daily lives of Nigerians who rely on petrol for transportation and power generation due to the country’s unreliable electricity supply.
The government’s decision to unify foreign exchange windows has further complicated the situation, leading to a sharp depreciation of the naira from ₦700 to over ₦1600 per dollar in the parallel market. This devaluation has driven up the prices of food and basic commodities, intensifying the economic challenges faced by Nigerians as inflation continues to rise.
As the Dangote Refinery begins to contribute to the nation’s fuel supply, there is hope that it will help alleviate some of these challenges, but the broader economic pressures remain a significant concern.