Refined petrol from Dangote disrupting European market

The Organisation of the Petroleum Exporting Countries (OPEC) has acknowledged the transformative impact of Nigeria’s Dangote Petroleum Refinery on global and local petroleum markets.

According to OPEC’s Monthly Oil Market Report, published on January 15, 2025, the refinery’s production is reducing Nigeria’s reliance on imported refined petroleum products, particularly from Europe.

The report highlighted the potential ripple effects on international markets, noting, “The ongoing operational ramp-up efforts at Nigeria’s new Dangote refinery and its gasoline exports to the international market will likely weigh further on the European gasoline market.”

For decades, Nigeria has grappled with energy challenges. The nation’s state-owned refineries remained dormant until recently, forcing heavy reliance on imports to meet domestic fuel demands. This dependency has contributed to chronic fuel shortages and long queues at filling stations.

Since the removal of fuel subsidies in May 2023, prices of petrol have skyrocketed from approximately ₦200/litre to ₦1000/litre, compounding difficulties for citizens already struggling with unreliable electricity and high costs of living.

In December 2023, Africa’s foremost industrialist, Aliko Dangote, launched operations at his $20 billion refinery in Lagos.

With an initial capacity of 350,000 barrels per day, the facility aims to reach its full capacity of 650,000 barrels daily by the end of 2025. The refinery has already commenced supplying diesel, petrol, and aviation fuel to domestic marketers.

OPEC’s report further emphasized the broader market implications, stating, “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.”