Dangote refinery begins processing petrol

Nigeria's Dangote Oil Refinery has begun processing petrol after delays caused by recent crude shortages, an executive said on Monday.

The $20 billion refinery on the outskirts of Lagos, built by Nigerian billionaire Aliko Dangote, began operations in January with output of products including naphtha and jet fuel.

With a capacity of 650,000 barrels per day, Africa's largest refinery promises to ease oil producer Nigeria's costly reliance on imported oil products.

"We are testing the product (petrol) and subsequently it will start flowing into the product tanks," Devakumar Edwin, a vice president at Dangote Industries Limited, said.

'We'll export if no one is buying'

He did not say exactly when the petrol would hit the local market.

Edwin said state-oil firm NNPC Ltd, Nigeria's sole importer of petrol, would buy its petrol exclusively.

"If no one is buying it, we will export it as we have been exporting our aviation jet fuel and diesel," Edwin said.

The delivery of petrol into the Nigerian market will ease NNPC's struggle to supply the local market. The company is reeling with debts of $6 billion to oil traders for supply since January.

Long queues

This has affected its ability to supply the local market where fuel queues have persisted since July.

Prices have jumped by 45% from the official price of 617 naira ($0.3942) announced after subsidies were removed last year.

"The news that Dangote is processing petrol couldn't come at a more crucial time given NNPC's statement about its difficulties securing imported supply due to financial strain," said Clementine Wallop, director, sub-Saharan Africa at political risk consultancy Horizon Engage.

She said this "prompts the question of how NNPC will manage purchasing from Dangote, and impresses the need for greater transparency in its finances."

Nigeria is Africa's top oil producer yet it imports almost all its fuel due to years of neglect of its national refineries.

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