OIL PRICE NG

Retailers of petroleum products are nearing the final stages of negotiations with four offshore refineries about supplying various petroleum products. Reports indicate that a successful conclusion to these talks could result in the importation of more affordable petrol, diesel, aviation fuel, and cooking gas.

The president of the association has also called for the rehabilitation of the Warri and Kaduna refineries to improve the stability of the distribution chain. Legit.ng journalist Victor Enengedi, with over ten years of experience in covering Energy, MSMEs, Technology, and the stock market, reports that the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) is discussing the acquisition of 300,000 metric tons of Petrol, Diesel, Jet A1, and cooking gas for the Nigerian market by early 2024.

This move counters suggestions in some quarters to cap the retail pump price of petrol at N1,200 per liter. PETROAN President, Mr. Billy Harry, revealed in an interview that refineries in Kazakhstan and Houston are interested in partnering with the association.

He also mentioned exploring alternative funding methods to ease the pressure on Nigeria’s forex market and noted the importance of the recent rehabilitation of the Port Harcourt refinery. However, he emphasized the need to refurbish the Warri and Kaduna refineries for more stable distribution.

The economic challenges facing fuel retailers, especially those with daily sales under 5,000 to 10,000 liters, were highlighted, including rising diesel costs for generators and other overheads that are eating into profit margins.

Additionally, there has been clarification about the continuation of the petrol subsidy, dispelling rumors of an imminent petrol price increase.

Dangote refinery in Lagos, with a capacity of 650 barrels per day, is poised to receive the final shipment of 1 million barrels of crude oil on Monday, marking a pivotal moment for the start of operations at the facility.

This follows the plant’s receipt of its fifth delivery of Bonny Light crude oil, totaling one million barrels, from the Nigerian National Petroleum Company Limited (NNPCL) on Thursday. The Dangote Group relayed this information through a statement released on Friday.

This advancement is crucial for the refinery as it gears up to initiate operations, aiming to help Nigeria become self-reliant in petroleum products and curb the outflow of foreign exchange used for importing refined products.

The statement detailed that this fifth shipment is part of the six million barrels expected at the Dangote Petroleum Refinery. It arrived on Thursday at the Single Point Mooring (SPM)-C2 Dangote Offshore Oil Terminal and has since been transferred to the refinery’s crude oil storage.

Previously, the refinery, located in the Lagos Free Trade Zone, had processed four million barrels of crude. Akin Omole, the managing director of Dangote Ports Operations, indicated at the Dangote Quay in Ibeju-Lekki, Lagos, that the refinery would process approximately 4 million barrels of crude by the end of 2023, with the rest arriving by early January 2024.

The full delivery of six million barrels will support the refinery’s inaugural run and kick-start the production of diesel, aviation fuel, and Liquefied Petroleum Gas (LPG), eventually leading to petrol production.

The Dangote Petroleum Refinery is set to significantly mitigate fuel supply issues in Nigeria and neighboring West African nations, with a production capacity that meets and exceeds Nigeria’s needs for all refined products, including gasoline, diesel, kerosene, and aviation jet fuel, with excess for export.

The refinery’s infrastructure includes two SPMs positioned 25 kilometers offshore for crude processing and three separate SPMs for product discharge. It is equipped to load 2,900 trucks per day and has a marine facility capable of handling the world’s largest vessels, ensuring self-sufficiency in operations. Moreover, the refinery’s products will adhere to Euro V standards.

Designed to meet the emission and effluent norms set by the US EPA, European standards, the Department of Petroleum Resources (DPR), and the African Refiners and Distribution Association (ARDA), the refinery stands as a testament to Dangote Group’s commitment to developing and executing large capital projects. Mr. Aliko Dangote, President of the Dangote Group, expressed his enthusiasm upon receiving the first consignment, stating the group’s dedication to scaling the refinery to full capacity and eagerly anticipating the delivery of the first batch of products to the Nigerian market.

Nigeria’s Dangote refinery, a significant step towards enhancing the nation’s refining capacity and energy security, has received a one-million-barrel crude oil cargo from Shell International Trading and Shipping Company Limited (STASCO). This shipment marks the third million-barrel delivery to the refinery’s Single-Point Mooring.

ARISE NEWS has learned that a fourth crude shipment is en route.

Preparing to operate at 350,000 barrels per day (bpd), Dangote Refinery is on track to start producing diesel and aviation fuel by mid-January 2024, with Premium Motor Spirit production to follow.

With the capability to fulfill Nigeria’s entire demand for all refined products including gasoline, diesel, kerosene, and aviation jet, Dangote Petroleum Refinery also plans to export these products.

This month, the $20 billion refinery commenced its operations with the arrival of its first 950,000-barrel cargo of Nigeria’s Agbami crude. The tanker, chartered by the Nigerian National Petroleum Company (NNPC), signified the initial crude supply for the refinery’s production.

NNPC, holding a 20% stake in the refinery, agreed to supply 6 million barrels of crude oil to Dangote refinery in December to kickstart its operations.

Aliko Dangote, the owner, stated that the refinery would reach full capacity, refining 650,000 barrels per day, by the end of 2024. He emphasized in a November interview that the refinery would initially process Nigerian crude, prioritizing domestic supply before exporting, particularly to the West African region.

Dangote mentioned, “We aim to start our refinery with Nigerian crude. We’re more than ready and our gasoline products will soon be available.”

The refinery, located near Lagos, faced delays since its announcement in 2013, despite significant progress in 2019. In September 2023, it announced plans to produce diesel and kerosene by October 2023, and gasoline a month later. However, delays due to crude supply issues pushed back the start date.

On November 25, a revised operation commencement date was set for December 2023, with the refinery expecting 6 million barrels of crude in that month.