The Dangote Petroleum Refinery, with its capacity to process 650,000 barrels per day, has started to make waves in the global oil market. Since commencing production and export of petroleum products such as diesel and fuel in September, the refinery has already had a noticeable impact on the flow of Premium Motor Spirit (PMS), also known as petrol, particularly in the European market.
In its latest report, the Organisation of the Petroleum Exporting Countries (OPEC) highlighted that the operational start of the Dangote Refinery has significantly reduced the importation of petroleum products from Europe to Nigeria and other nations. Historically, Nigeria has relied heavily on imports to meet its domestic fuel demands. However, with the Dangote Refinery’s production of gasoline, the country is now able to meet a larger share of its own needs, decreasing the demand for European petrol exports.
OPEC’s report noted, “The ongoing operational ramp-up efforts at Nigeria’s new Dangote refinery and its gasoline exports to the international market will likely weigh further on the European gasoline market.” This suggests that as Nigeria continues to produce its own petrol, it will have an increased presence in global markets, potentially shifting the flow of gasoline and requiring adjustments in export destinations.
OPEC also pointed out that the global refinery margins saw a drop in places like the US Gulf Coast (USGC) and Singapore in December, mainly due to weak export incentives and rising product availability, except for jet/kerosene in the USGC and gasoline (92) in Singapore. However, refining margins in Rotterdam experienced an uptick, attributed to increased travel activity during the year-end holiday season. This upward trend was seen in gasoline, gasoil, and fuel oil as well.
The shift in refining dynamics also saw global refinery intake increase by 1.1 million barrels per day (mb/d), with offline capacities significantly reduced in December, aligning with historical trends. As Nigeria’s refinery ramps up production, the global flow of petroleum products is expected to evolve, with new export destinations emerging to absorb the additional volumes, as European markets adjust to the impact of the Dangote Refinery’s operations.
