Nigeria’s new Dangote oil refinery is ramping up gasoil exports to West Africa, capturing market share from European refiners. According to traders and shipping data, the $20 billion refinery is currently producing a lower grade of gasoil while awaiting the restart of units needed for cleaner fuels, leading it to seek buyers in neighboring markets.
In May, gasoil exports from the refinery reached nearly 100,000 barrels per day (bpd), almost doubling April’s levels, with most exports directed to other West African countries and one shipment to Spain. However, preliminary data for June shows a significant drop in gasoil volumes, although overall oil product exports remained high at 225,000 bpd.
This shift has impacted European markets significantly. EU and UK gasoil exports to West Africa fell to a four-year low of 29,000 bpd in May, while Russian exports dropped to an eight-month low of 87,000 bpd.
Dangote has been selling high-sulphur gasoil locally, but a dispute has arisen over responsibility for the dirtier fuel. The Petroleum Industry Bill mandates a sulphur content of 50 parts per million (ppm), but the regulator allowed sales of gasoil with sulphur content above 200 ppm until June to give local refineries and importers more time to comply.
As European countries tighten regulations on high-sulphur gasoil exports, Dangote's refinery finds markets with more lenient standards. Aliko Dangote stated that once fully completed, the refinery will supply products to West and Central African countries, reducing the need for $17 billion in oil imports into the continent and potentially leading to the closure of some European refineries.
In 2023, West Africa became the largest recipient of Europe’s gasoline exports, receiving one-third of the continent’s average exports of 1.33 million bpd.
In May, gasoil exports from the refinery reached nearly 100,000 barrels per day (bpd), almost doubling April’s levels, with most exports directed to other West African countries and one shipment to Spain. However, preliminary data for June shows a significant drop in gasoil volumes, although overall oil product exports remained high at 225,000 bpd.
This shift has impacted European markets significantly. EU and UK gasoil exports to West Africa fell to a four-year low of 29,000 bpd in May, while Russian exports dropped to an eight-month low of 87,000 bpd.
Dangote has been selling high-sulphur gasoil locally, but a dispute has arisen over responsibility for the dirtier fuel. The Petroleum Industry Bill mandates a sulphur content of 50 parts per million (ppm), but the regulator allowed sales of gasoil with sulphur content above 200 ppm until June to give local refineries and importers more time to comply.
As European countries tighten regulations on high-sulphur gasoil exports, Dangote's refinery finds markets with more lenient standards. Aliko Dangote stated that once fully completed, the refinery will supply products to West and Central African countries, reducing the need for $17 billion in oil imports into the continent and potentially leading to the closure of some European refineries.
In 2023, West Africa became the largest recipient of Europe’s gasoline exports, receiving one-third of the continent’s average exports of 1.33 million bpd.