Nigeria: Dangote refinery starts supplying diesel to West Africa

The Dangote oil refinery is stepping up its diesel exports to West Africa, outperforming European refiners thanks to its proximity and logistical advantages. Technical problems led to a change in production, resulting in exports of low-sulphur diesel worth $20.5 billion.

Despite the challenges, the Dangote refinery is committed to meeting the 10 ppm diesel standard within two weeks, according to Managing Director Davakumar Edwin. In May, diesel exports from the refinery reached nearly 100,000 barrels per day, mainly to West African countries.

Built by Aliko Dangote, Africa's richest man, at a cost of 20 billion dollars on the outskirts of Lagos, the refinery is currently producing a lower quality of diesel than expected. This is due to the imminent restart of units needed to produce cleaner fuels, which is prompting the refinery to target buyers in neighbouring markets, reports Reuters.

Dangote's diesel exports reached nearly 100,000 barrels per day in May, almost double April's levels, according to Kpler data. Most of these exports were destined for other West African countries, with one shipment going to Spain. Preliminary data for June show a sharp fall in diesel volumes, although overall exports of petroleum products, notably fuel oil, naphtha and paraffin, remained relatively high at 225,000 barrels per day.

Gasoil exports from the EU and the UK to West Africa fell to their lowest level for four years, reaching 29,000 barrels per day in May, according to Kpler data. Russian exports to the region also fell, reaching an eight-month low of 87,000 barrels per day in May.

In addition, Dangote sells diesel with a high sulphur content on the Nigerian market, but faces disputes with local retailers over who is responsible for selling this fuel. However, Davakumar Edwin remains optimistic about meeting the new standards, saying that the necessary equipment will be operational within two weeks, enabling gradual compliance with the 10 ppm diesel standard.

At a national level, the refinery has to deal with disputes with local retailers over fuel quality. The Nigerian Petroleum Act of 2021 imposes a sulphur content of 50 ppm, but regulators have authorised the local sale of diesel containing more than 200 ppm until June. Faced with stricter European regulations on exports of high-sulphur diesel, the refinery is targeting markets where fuel standards are more lenient, with sulphur levels ranging from 800 to 1,300 ppm.