The Dangote Refinery has opened its doors for direct loading of petroleum products at its facilities. This will come as a bit of good news to the Independent Petroleum Marketers Association of Nigeria, as the agreement has been over a month.
At the time of writing, direct lifting has begun, with IPMAN members already lifting millions of litres at the facility, located in the Lekki free trading zone in Lagos.
It’s worth noting that this isn’t the start of business between IPMAN and Dangote. Per reports from the organization’s publicity wing, independent marketers have long since been loading petroleum products by proxy.
They’ve been doing so through MRS Oil, pending the time the terms of agreement on direct loading was finalized.
Good News for the $20bn Refinery – Any Catch?
Direct loading is great news for Dangote refinery as much as it is for marketers and the general public. However, there’s still a niggling question: is there any catch to this deal?
Thankfully, there isn’t. IPMAN will be treating the deal as it is – direct loading of petrol – as opposed to being a middleman arrangement. It certainly helped that the Dangote refinery had decided to bump the PMS price down from N990 to N970.
This meant two things: there’s more demand for the product in the local market and middlemen get eliminated. When you factor in the fact that the products are already moving directly to commuters, all is well so far.
About Dangote Refinery
The Dangote Refinery is located in the Lekki Free Trade Zone in Lagos, Nigeria. At $20bn initial capital, the facility is Africa’s largest refinery and one of the most significant projects globally in terms of its capacity.
It has the ability to put out over 650,000 barrels of crude oil per day, with the aim to drastically reduce Nigeria’s dependence on imported refined petroleum products and position the country as a refining hub in Africa.
The refinery began operations in January 2024. It has already started exporting products like low-sulfur straight-run fuel oil and Euro V diesel, which meets European environmental standards. Additionally, it supplies diesel and jet fuel to domestic markets and exports to international markets like the U.S. and the Caribbean. In late November 2024, it started direct sales to independent PMS marketers.
By processing crude locally, the refinery is expected to save Nigeria billions in fuel import costs and boost foreign exchange earnings in the mid to long term. Its role as a regional supplier of refined products might put competitive pressure on European refineries, traditionally serving West Africa.
