Devakumar V.G. Edwin, Vice President of Dangote Group Limited, revealed this during a Space event on X on Wednesday, 12th September that the Dangote Refinery is capable of producing up to 54 million liters of refined petroleum products per day. This is contingent upon a adequate supply of crude oil. Nigeria consumes about 60 million barrels of crude oil per day, at least 30% of which is estimated to be petroleum that is smuggled out of the country to be sold at higher price. The consumption of petroleum in Nigeria tend to fall by between 28 to to 35 per cent in the brief periods when the country is able to eliminate the subsidy on petrol or reduce it to a level that makes trucking it over Nigeria’s porous borders unattractive. Dangote Petroleum Refinery, the largest in Africa, has the capacity to supply 650,000 barrels of refined products per day.
It is not clear whether the 54 million litres of ready production capacity that the Dangote Refinery has now attained refers to only Premium Motor Spirit (PMS), popularly known as petrol or it is a mix of PMS and other fuels such as diesel, jet fuel etc. The expectation is that Dangote Refinery will supply Nigeria’s daily consumption of petrol. It has started producing diesel in April 2024 and announced on 3 September that it has stated producing PMS.
Devakumar emphasized that the refinery’s output is more than adequate to meet the country’s petroleum needs. Specifically, he noted that the refinery’s 44% output capacity alone is sufficient to satisfy the entire domestic demand for refined products. Nigeria National Petroleum Company Limited (NNPCL) has been unable to supply Dangote Refinery an adequate level of crude oil; only about 60% of the country’s 1.3 million barrels per day remains of the nation’s crude oil after the international oil companies take their contractual share of oil output. And a significant component of Nigeria’s share of oil production has been pre-sold (so-called forward sales) to relieve Nigeria’s foreign exchange scarcity.
The Petrol Subsidy Barrier
The Dangote Refinery can crude import oil and sell refined petroleum in Nigeria- this would still resolve the scarcity of petroleum all over the country. But the Nigerian government has refused to abolish the fuel subsidy and has said it would buy Dangote Oil only if is cheaper than imported petrol. The confusion surrounding pricing has meant that Dangote Refinery has not been able to supply petrol to the market despite intense petrol scarcity all over Nigeria.
