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Dangote refinery reshapes European fuel market, reducing dependence on imports

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Dangote petroleum refinery

The Organisation of the Petroleum Exporting Countries (OPEC) has recently drawn attention to the significant role the Dangote Refinery is playing in reshaping the European fuel market.

According to Diaspora digital media (DDM) report, the Dangote Refinery, with a production capacity of 650,000 barrels per day, began operations in January of the previous year and started producing Premium Motor Spirit (PMS) in September.

This marked a major shift for Nigeria, which had previously been entirely reliant on fuel imports.

Today, the refinery is making a considerable impact by not only satisfying local demand but also exporting petrol, diesel, and aviation fuel to various countries, both in Africa and beyond.

OPEC’s latest report highlighted how the Dangote Refinery’s production efforts are influencing global fuel dynamics, particularly in Europe.

Before the refinery’s establishment, Nigeria had no domestic refining capacity to meet its fuel needs, relying entirely on imports.

However, the Dangote Refinery is now steadily reducing Nigeria’s dependency on foreign imports, especially from Europe.

As the refinery increases its gasoline production and exports, it is expected to have a more significant impact on international gasoline markets.

The refinery’s growing output will likely free up gasoline volumes in global markets, which will require new destinations and adjustments in fuel flow patterns.

The OPEC report noted that by the last quarter of 2024, Nigeria’s petroleum product imports had declined, reflecting the success of the Dangote Refinery in reducing the country’s dependence on imported fuels.

This shift was seen as beneficial for Nigeria’s external financial position.

In Europe, the gasoline crack spread in Rotterdam against Brent crude showed a slight increase, partly due to strong export activities, including those from Nigeria’s Dangote Refinery.

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However, inventories at the Amsterdam-Rotterdam-Antwerp (ARA) storage hub remained high, with further stockpiles expected to build up as winter demand decreased.

The OPEC report warned that the ongoing recovery in global gasoline refinery outputs, including that of the Dangote Refinery, could exacerbate bearish market conditions.

On the production side, Nigeria’s crude oil production has seen gains as well.

According to OPEC’s Monthly Oil Market Report, Nigeria’s daily crude oil production rose to 1.507 million barrels per day (bpd) in December 2024, marking a 12,000 bpd increase from the previous month.

This increase is indicative of Nigeria’s broader efforts to improve its oil industry and further reduce its reliance on foreign imports.

The Dangote Refinery’s capacity to process 650,000 bpd places it among the largest refineries in the world.

According to Bloomberg, the $20 billion refinery now ranks above the ten largest refineries in Europe, surpassing Shell’s Pernis refinery in the Netherlands, which has an installed capacity of 404,000 bpd.

Other notable European refineries such as BP Rotterdam (380,000 bpd), TotalEnergies Antwerp in Belgium (338,000 bpd), and ExxonMobil’s Antwerp facility (307,000 bpd) are all smaller than the Dangote Refinery.

This global ranking positions the Dangote Refinery as a key player in the refining sector, not only in Africa but also on the global stage, particularly as it contributes significantly to the reshaping of fuel trade routes.

The Dangote Refinery’s success also impacts the international market by altering fuel trade dynamics and reshuffling traditional markets.

As the refinery continues to ramp up its production and export capabilities, its influence on the European market will likely increase.

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The reallocation of gasoline volumes and adjustment of international fuel flows are some of the potential consequences that are expected to continue influencing the global market.

In conclusion, the Dangote Refinery has fundamentally changed Nigeria’s fuel production landscape and is making significant inroads into global fuel markets.

Its ability to reduce Nigeria’s dependency on fuel imports and contribute to global exports, particularly to Europe, is reshaping the international fuel market.

The ongoing expansion of the refinery’s operations will continue to drive adjustments in global fuel flows, creating new trade routes and reshaping the competitive dynamics of the fuel industry worldwide.

 


For Diaspora Digital Media Updates click on Whatsapp, or Telegram. For eyewitness accounts/ reports/ articles, write to: citizenreports@diasporadigitalmedia.com. Follow us on X (Fomerly Twitter) or Facebook

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