Nigeria’s newly inaugurated Dangote oil refinery is ramping up gasoil exports to West Africa, encroaching on the market share traditionally held by European refiners, according to traders and shipping data.
According to reports, data from analytics firm Kpler indicated that gasoil exports from the refinery surged to nearly 100,000 barrels per day (bpd) in May, almost doubling April’s figures. While most of the exports were directed to other West African nations, one cargo was dispatched to Spain.
Preliminary data for June shows a sharp decline in gasoil volumes, though overall oil product exports, including fuel oil, naphtha, and jet fuel, remained relatively high at 225,000 bpd.
“The refinery has altered the balances in West Africa,” affecting European markets as a result, an European distillates trading source commented.
Kpler data revealed that EU and UK gasoil exports to West Africa dropped to a four-year low of 29,000 bpd in May, while Russian exports to the region fell to an eight-month low of 87,000 bpd.
Locally, Dangote has also been selling some high-sulphur gasoil but faces a dispute with local fuel retailers over the sale of this higher-sulphur fuel. Nigeria’s oil law, passed in 2021, mandated a 50 parts per million (ppm) sulphur content, in alignment with the sub-regional ECOWAS standards adopted in 2020. Nevertheless, the regulator had permitted gasoil above 200 ppm to be sold locally since the beginning of the year until June, to allow local refineries and importers more time to comply with the new standard.
As European nations, including major hubs Belgium and the Netherlands, enforce stricter rules on high-sulphur gasoil exports, cargoes from the Dangote refinery have found a market in regions with more lenient fuel standards.
A trading source familiar with the specifications disclosed that the refinery has been producing and exporting gasoil with 800-1,300 ppm sulphur content, significantly exceeding the 200 ppm limit.
However, the company assured that it is on track to achieve a 10 ppm sulphur content soon. “We have commissioned the equipment, and it will be completed within two weeks,” stated Davakumar Edwin, an executive at the Dangote Refinery. In a statement last week, Dangote reiterated their commitment to gradually meeting the new standard.
