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Dangote refinery imports crude as NNPCL swaps oil for loans

The Dangote Petroleum Refinery is currently importing crude oil and expects its first crude cargo in two weeks’ time, the Executive Director, Dangote Group, Devakumar Edwin, has revealed.

Although the Nigerian National Petroleum Company Limited trades crude oil on behalf of Nigeria, Edwin in an interview with S&P Global Commodity Insights on Monday, said the NNPCL had committed its crude to other entities.

The Dangote refinery boss did not disclose the other entities receiving the oil company’s crude but NNPC disclosed last month it had entered into a $3bn crude oil-for-loan deal with African Export-Import Bank.  The deal allowed the company to pledge future oil production to the bank  as repayments for the loan.

Also, Edwin pointed out that the importation of crude by Dangote refinery was temporary, as the firm would receive supply from NNPCL from November.

Edwin went ahead to state that the firm would begin the production of up to 370,000 barrels per day of crude that would give rise to Automotive Gas Oil, popularly called diesel, and jet fuel in October 2023.

For Premium Motor Spirit, popularly called petrol, the Dangote Group’s boss said the plant would produce it by November 30, 2023.

This came as oil marketers stated that the prices of diesel and jet fuel would only crash when the Dangote refinery starts receiving crude oil from Nigeria, and not by importing crude.

Meanwhile, Edwin stated in the interview that the Dangote Refinery would initiate a gradual increase in petrol production, aiming to reach an impressive 650,000 barrels per day by November 30.

He emphasised the refinery’s readiness to receive crude oil, stating, “Right now, I’m ready to receive crude. We are just waiting for the first vessel. And so, as soon as it comes in, we can start.”

Regarding the shift in the original timeline, Edwin clarified, during his conversation with S&P, that the NNPCL had already committed their crude oil to another entity on a forward basis, causing a temporary delay.

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