After more than a year since its launch in May 2023, Dangote Refinery has started producing its first batch of Premium Motor Spirit (PMS), commonly known as petrol, from its 650,000 barrels-per-day facility. At a press conference, Aliko Dangote, the owner of the refinery and a prominent Nigerian billionaire, expressed that this development is a significant milestone for Nigerians, calling it a “celebration day.”
He assured the public that the refinery would produce high-quality petrol, which would help extend the lifespan of vehicle engines and reduce the frequency of engine problems that have been common among drivers in the country. He emphasized that the quality of petrol produced at the Dangote Refinery would be on par with global standards, stating, “The quality here will match that of anywhere in the world; US, America, we will make sure that nobody will beat us in terms of quality.”
Dangote also highlighted the economic benefits of the refinery’s operations, noting that once his company completes negotiations with the Nigerian National Petroleum Company Limited (NNPCL), the refined petrol would be available in the market. He expressed confidence that the refinery would play a crucial role in reviving Nigeria’s industrial and manufacturing sectors by promoting import substitution, which would reduce the country’s reliance on foreign imports, save foreign exchange, earn additional revenue, stabilize the naira, and help lower inflation and the cost of living.
The Dangote Refinery began partial operations in December 2023, with an initial processing capacity of 350,000 barrels per day. The refinery, which faced regulatory challenges during its early days, aims to achieve full operational capacity of 650,000 barrels per day by the end of the year. It has already started supplying diesel and aviation fuel to local marketers, and with the recent rollout, petrol has been added to its product lineup.
The commencement of petrol production by the Dangote Refinery comes amid financial difficulties faced by the NNPCL, which recently disclosed that it owes substantial debts to petrol suppliers. This debt, reportedly amounting to $6 billion, has exacerbated fuel scarcity in Nigeria, a persistent problem since early 2024. The NNPCL has attributed these shortages to various factors, including logistical challenges and flooding. In a recent statement, NNPCL spokesperson Olufemi Soneye acknowledged the financial strain, noting that the company’s significant debt burden poses a threat to the sustainability of the country’s fuel supply.
Nigeria, the most populous country in Africa, faces significant energy challenges, with all of its state-owned refineries currently non-operational. The country depends heavily on imported refined petroleum products, with the NNPCL being the primary importer. As a result, fuel queues are a common sight across Nigeria, and petrol prices have surged since the government removed subsidies in May 2023, rising from around ₦200 per litre to about ₦800 per litre. This increase has worsened the hardships faced by Nigerians, who rely on petrol to power both their vehicles and generators, particularly given the country’s long-standing issues with unreliable electricity supply.
The government also unified its foreign exchange (forex) windows, which led to a sharp decline in the value of the naira, from about ₦700 to the dollar to over ₦1600 at the parallel market. This depreciation has caused a rapid increase in the prices of food and basic commodities, leaving many Nigerians struggling with the resulting inflation.
