For the first time in nearly three decades, Nigeria has commenced local production of petrol, following the successful test production at the 650,000 barrels per day at Dangote Refinery in Lagos.
The refinery, owned by Africa’s richest man, Aliko Dangote, is set to begin selling its refined petrol immediately, marking a significant milestone for the country.
This development comes as a relief to Nigerians who have been grappling with severe petrol scarcity across the nation.
Despite spending billions of dollars on maintenance, Nigeria’s four state-owned refineries have remained non-functional for over 20 years, forcing the country to rely heavily on fuel imports.
Nigeria, which consumes around 66 million liters of petrol daily, has been spending over $10 billion annually on fuel imports.
The commencement of production at the Dangote Refinery is expected to save the country billions of dollars in foreign exchange and improve the local availability of petrol, which is crucial for businesses and households.
According to reports, the refinery is on the verge of producing significant volumes of petrol, with the fuel potentially becoming available as early as this week.
The facility, Africa’s largest oil refining plant, has a capacity to process 650,000 barrels of oil per day, with more than half of that being converted into petrol.
The Nigerian National Petroleum Corporation (NNPC), which has been struggling with debts amounting to $6 billion to oil traders since January, is expected to be the sole purchaser of the refinery’s petrol output.
However, if there are no buyers in the domestic market, the refinery may export the product, as it has done with aviation jet fuel and diesel.
The commencement of petrol production at the Dangote Refinery comes at a critical time, given the ongoing fuel shortages in Nigeria.
The move is expected to alleviate the NNPC’s challenges in securing imported fuel due to financial constraints.
However, concerns have been raised about how the NNPC will manage its finances to purchase fuel from the Dangote Refinery, highlighting the need for greater transparency in its operations.
Meanwhile, a survey by Reuters indicated that OPEC’s oil output fell in August to its lowest level since January 2024, with Nigeria slightly increasing its exports during the period.
The survey noted that Libya experienced the largest supply loss due to political unrest, while other declines were observed in Iraq and Iran, both of which are exempt from OPEC+ production limits.