Nigeria: Dangote refinery begins gasoline deliveries

Nigeria's Dangote refinery, the largest in Africa, has finally started delivering gasoline, a game-changer for this oil-rich country that frequently faces gasoline shortages.

The 650,000-barrel-per-day refinery, built by Nigerian billionaire Aliko Dangote, began producing diesel and jet fuel in January, but the OPEC member has had to resort to costly gasoline imports to keep cars running due to a lack of refineries.

On September 3, the refinery finally began producing gasoline, and on Sunday, some 500 trucks from the state-owned Nigerian National Petroleum Corporation arrived at the huge facility to start delivering fuel, in what Finance Minister Wale Edun called "a historic breakthrough day".

"Today we have reached an important milestone, a key step towards Nigeria's energy self-sufficiency," said Mr Edun, who visited the refinery for the occasion.

"We have taken an important step towards energy security in Nigeria," he added.

Nigeria trades billions of dollars worth of crude oil for gasoline, which it has subsidized for years to keep domestic prices low. Fuel imports and subsidies have led to a massive drain on foreign exchange reserves, at a time when Nigeria is facing falling oil revenues and a shortage of foreign currency.

Devakumar Edwin, vice-president of Dangote Industries, said the refinery would meet "all the country's needs" with only 44% of its production.

With the remaining 56% to be exported, Mr. Edwin added that the facility would not only reduce dependence on imports, but also relieve Nigeria's foreign exchange reserves through export earnings.

Scheduled to open in 2021, the refinery was officially inaugurated by President Muhammadu Buhari last year.

Since coming to power in May last year, President Bola Ahmed Tinubu has ended long-standing fuel subsidies and allowed the naira currency to float as part of economic reforms that he believes will attract foreign investment and promote long-term growth.

But in the short term, fuel prices have doubled, inflation hit 34% in June, its highest level for three decades, and the naira has collapsed against the dollar, putting further pressure on the prices of imported goods.

The economic capital Lagos has seen weeks of long, sporadic queues at filling stations due to fuel shortages.

The state-owned energy company raised the price of petrol from 568 naira ($0.36) a liter to at least 855 naira on Tuesday. Private operators often have shorter queues because they sell at higher prices.

The energy company said in early September that financial tensions had hampered its ability to maintain fuel supplies, even after reporting a record profit of 3.3 trillion naira, or $2 billion, last month.

Gasoline from the refinery should be available at service stations from October 1.