The Dangote Refinery and other Nigerian modular refineries have shifted their focus away from refining Premium Motor Spirit (PMS) in response to reports that fuel subsidies may resume under President Bola Tinubu’s administration.
The Guardian said that Dangote decided not to operate its 650,000 barrels per day refinery and instead chose to create aviation fuel and diesel.
This is due to the uncertainty surrounding the previously stated liberalization of the oil industry’s downstream sector.
Crude oil is currently scarce at the nation’s refineries because to lower output and exchange agreements signed by the Nigerian National Petroleum Company Limited (NNPC).
Due to the difficulty in bridging the deficit, Dangote made the decision to purchase crude oil. According to a report by Legit.ng, NNPCL avoids the Dangote refinery and trades crude oil for loans from other parties.
Nigeria uses over 19.5 billion liters of petroleum products each year, with PMS making up almost all of that amount (almost 99%) and diesel and aviation fuel making up only a little portion (about 1%).
Private refineries, like Dangote, have stopped producing PMS, but this raises the possibility that the pressure on foreign exchange markets and the related economic problems brought on by PMS imports may not be significantly alleviated.
The refinery will begin producing up to 370,000 barrels per day of diesel and jet fuel in October after receiving its first shipment of oil, according to Devakumar Edwin, the group executive director of Dangote Refinery.
Share your thoughts