The Dangote Refinery has achieved a significant milestone, exporting its jet fuel to major international destinations, including Iceland, Tenerife, and London.
A report by S&P Global Commodity Insights reveals that the Nigerian-made aviation fuel from the refinery has reached renowned locations such as Heathrow Airport in the UK, demonstrating the facility’s growing production scale.
The report further notes that from January to October this year, most of the refinery’s supply has been routed to the Lome transshipment hub off Togo. Additionally, South Korea has emerged as the largest single export destination, receiving an impressive 23,000 barrels per day (b/d) of naphtha.
The refinery has also exported substantial volumes of gasoil to Ghana and other West African nations. Once the $20 billion mega facility achieves full operational capacity next year, at least eight African countries are expected to import its products.
S&P Global highlights that the Dangote Refinery’s output has already established Nigeria as a net exporter of jet fuel, naphtha, and fuel oil. Commodity Insights forecasts that by next year, Nigeria could export nearly 50,000 b/d more gasoil than it imports, with export volumes potentially tripling by 2026.
Nigeria’s Domestic Market Challenges
Dangote Refinery was initially designed to reduce Nigeria’s reliance on imported fuel and was not expected to export significant volumes of petrol. However, in light of high domestic fuel prices, the company is reportedly exploring export markets.
S&P Global Commodity Insights reports that Nigeria’s state oil firm, NNPC, previously relied on imports to meet 350,000 barrels per day (b/d) of the nation’s petrol demand. However, in November, NNPC announced plans to exclusively source petrol from domestic refineries.
Despite this move, Dangote Refinery is projected to produce only about 50,000 b/d of petrol as its residue fluid catalytic cracking unit scales up. Meanwhile, the refinery has committed to exporting 200,000 metric tons (mt) of petrol, raising concerns among experts about potential political tensions and added pressure on global refining margins.
Fuel Quality and Market Impact
Improved fuel quality from Dangote Refinery has led Nigeria’s fuel regulator to restrict access to substandard, low-cost imports. According to S&P Global, as the quality of locally produced fuel improved, the government ceased shielding consumers from rising prices.
Following the removal of subsidies in May 2023, petrol imports dropped by over 40% year-on-year, partly due to reduced fuel smuggling. Meanwhile, Dangote’s search for new petrol buyers is expected to further impact global refining margins. Projections indicate that petrol margins in Northwest Europe could drop from over $20 per barrel in early 2024 to approximately $7 per barrel by Q1 2025.
Dangote’s Growing Market Share in Jet Fuel
Earlier reports from Petroleumprice.ng highlighted that jet fuel from Dangote Refinery now commands nearly two-thirds of Nigeria’s market share. Data from Energy Intelligence, a US-based oil and gas trends tracker, shows that the 650,000 barrels per day (bpd) refinery has significantly reduced Nigeria’s reliance on imported aviation fuel while lowering prices by approximately $2 to $3 per metric ton.
“We’re already buying from Dangote [now]; it’s slightly cheaper or at least the same price as imports,” said Foluso Sobanjo, Managing Director of Asharami Synergy, in an interview with Energy Intelligence.
Energy Intelligence estimates that Dangote’s jet fuel now supplies about 67% of Nigeria’s market and nearly half of West Africa’s overall consumption. The report also states that Nigeria’s jet fuel imports have sharply declined from 13,000 b/d in 2023—when imports met all domestic demand—to just 5,000 b/d so far in 2024.
