Dangote Refinery Launches Gasoline Sales in Nigeria
Nigeria’s Dangote refinery, which produces 650,000 barrels per day, has started selling gasoline domestically, with the state-owned NNPC serving as the sole buyer. NNPC is paying Dangote in US dollars for September gasoline supplies, with a crude-for-gasoline swap beginning in October and settled in naira.
The refinery’s ex-refinery price for gasoline is fixed at $736/t, or 898.78 naira/litre ($0.55/l), with a retail price in Lagos of N950.22/l, reflecting recent price increases due to reduced government subsidies. The Petroleum Industry Act of Nigeria requires parties to negotiate gasoline prices directly.
The NNPC has historically relied largely on imports for domestic gasoline supplies, but Dangote’s efforts are expected to diminish this dependence.
While the refinery seeks to meet local demand, it is currently building up production, supplying 16 million litres over the weekend, well short of its full capacity of 57 million litres per day.
The residual fluid catalytic cracker (RFCC) is projected to be fully operational by October or November. NNPC will supply Dangote with 385,000 barrels per day of oil beginning in October, with gasoline sold exclusively to NNPC for domestic distribution. Diesel will be offered to additional consumers.
