The Organization of Petroleum Exporting Countries (OPEC) has cautioned that the upcoming operational launches of Nigeria’s Dangote refinery and Mexico’s Dos Bocas refinery will significantly impact gasoline markets in the United States and Europe. Previously, these regions were major suppliers of premium motor spirit (PMS) to countries like Nigeria and Mexico. The Dos Bocas refinery boasts a capacity of 340,000 barrels per day (bpd), while the Dangote refinery can process an impressive 650,000 bpd, positioning Nigeria to meet demand not just locally, but throughout West Africa.
OPEC’s 2024 World Oil Outlook suggests that these new mega-projects will reshape the international downstream market, particularly affecting gasoline supply chains. With both regions historically reliant on imports, the full operation of these refineries could lead to reduced dependence on external markets, potentially destabilizing existing refinery operations in the US and Europe, where market growth is stagnating.
The report also highlighted the geopolitical influences on oil trade dynamics, noting how the EU’s embargo on Russian oil has shifted crude import patterns, particularly toward the US and Middle East. This shift has allowed EU refiners to adapt, with increased imports from regions like India and new diesel exports from Middle Eastern plants.
Industry experts have expressed optimism about Nigeria’s emerging role in the global market. NJ Ayuk, Executive Chairman of the African Energy Chamber, noted that the Dangote refinery could rival major US facilities, and once fully operational, it is expected to alter fuel distribution in Europe. Wumi Iledare, a petroleum economics expert, suggested that the refinery’s products could significantly benefit neighboring Gulf of Guinea nations if priced competitively.
As operations commence, Dangote petrol is already reaching independent depots in Lagos, with major marketers like 11 Plc and Total Energies involved in distribution. However, independent marketers are still awaiting direct access to the refinery’s products. The Independent Petroleum Marketers Association of Nigeria (IPMAN) expressed hope for future direct distributions, which could alleviate long-standing fuel shortages.
On another note, the Human Rights Writers Association of Nigeria (HURIWA) has raised alarms over alleged price manipulation and tampering of fuel meters by marketers in Abuja. They called for immediate investigations by regulatory agencies to ensure fair practices in the fuel market, stressing the urgent need for action to protect consumers from unethical pricing schemes.
As these developments unfold, the global oil market may face a transformative shift, driven by new capacities in Nigeria and Mexico, ultimately reshaping trade dynamics and influencing regional fuel prices.
