Latest news with #DangoteRefinery
Business Insider
a day ago
- Business
- Business Insider
Dangote plans to list Africa's largest oil refinery in 2026 to quell monopoly fears
Dangote's decision to move forward with the listings of the oil and fertilizer refinery reflects the conglomerate's broader strategy to attract new investors and unlock greater value for shareholders. Aliko Dangote plans to list his Nigerian oil refinery on the stock market by the end of 2026. The Group also plans to list its urea fertilizer plant, producing 2.8 million tons annually, by the end of this year. The $20 billion Dangote Refinery, inaugurated in 2024, is Africa's largest with a processing capacity of 650,000 barrels daily. Aliko Dangote, Africa's richest man, has announced plans to list his massive Nigerian oil refinery on the stock market by the end of 2026, aiming to expand its investor base and ease concerns about monopoly power. Speaking at the African Export-Import Bank's annual general meeting in Abuja, Dangote also revealed that the Dangote Group will proceed with the stock market listing of its urea fertilizer plant, capable of producing 2.8 million tons annually, before the end of this year. Back in July, Dangote announced plans to list both the fertilizer and petrochemical divisions of the Dangote Refinery in the first quarter of 2025. The decision to move forward with the listings reflects the conglomerate's broader strategy to attract new investors and unlock greater value for shareholders. He also revealed plans for a dual listing of the refinery on both the London and Lagos stock exchanges. The $20 billion refinery, began operations in 2024 and is the largest on the African continent, with a capacity to process 650,000 barrels of crude oil per day. Ranked by Bloomberg as having a higher capacity than the ten largest refineries in Europe, the refinery currently produces aviation fuel, diesel, gasoline, and naphtha. Public listing to ease monopoly concerns Nigeria's downstream regulator and independent fuel marketers have clashed with Dangote, raising concerns about a potential monopoly in the local fuel market, similar to dominance seen in his other subsidiaries. But Dangote believes public listing will silence critics. 'It's important to list the refinery so that people will not be calling us a monopoly,' he said. 'They will now say we have shares, so let everybody have a part of it.' Earlier this year, Aliko Dangote projected that his conglomerate is on track to generate $30 billion in total revenue next year, despite growing concerns among global businesses about the potential impact of U.S. President Donald Trump's trade tariffs.
Business Insider
3 days ago
- Business
- Business Insider
How Dangote's 4,000 CNG trucks could reshape fuel supply in Nigeria
On August 15, Dangote Refinery will send out a fleet of 4,000 Compressed Natural Gas tanker trucks. With over 100 new CNG refuelling hubs, the idea is to deliver petrol and diesel straight from the refinery to retailers, manufacturers, telecoms, and airports. But this isn't just a publicity stunt. It's a smart move designed to cut costs and change fuel logistics in Nigeria. Dangote Refinery plans to deploy 4,000 CNG tanker trucks starting August 15. CNG truck implementation is anticipated to cut logistics expenses and stabilize fuel prices. While concerns about monopolization persist, supporters believe market efficiency will benefit consumers. What's driving this Dangote's refinery is running at about 85 per cent of its 650,000-barrels-per-day capacity, making it one of the world's largest single-train facilities. That size matters. A larger operation means a lower cost per barrel. Now, introduce CNG trucks, which are roughly 40 per cent cheaper to run than standard diesel tankers. When you combine those two, you eliminate a significant portion of the usual logistics markup that is factored into pump prices. Nigeria's downstream sector has been deregulated for years. Prices respond to global crude oil prices, exchange rates, and transportation costs. By taking control of the whole chain from refinery to delivery, Dangote can potentially pass on savings directly to customers and bulk buyers. Some voice worries about it being a monopoly. But there are now nine modular refineries in operation alongside the national NNPC. And registration is open to new entrants. Dangote is smart about using vertical integration to stay competitive, rather than shutting others out. Why it matters now Oil prices have been volatile. Brent crude has jumped from around $64 to $77 a barrel due to rising tensions in the Middle East. And Goldman Sachs warned that it could climb to $100 to $110 if things worsen in the Strait of Hormuz. Usually, that would drive up prices for Nigerian consumers. Dangote's logistics buffer could help prevent pump prices from spiking past ₦1,000 per litre. Although full details haven't been made public, sources indicate that early deployment will prioritise major commercial hubs, such as Lagos, Abuja, Port Harcourt, Kano, and Onitsha. The 100+ CNG refuelling stations are expected to roll out in stages, starting alongside the truck deployment in August and continuing through early 2026. This infrastructure will be critical. Without a strong network of refuelling hubs, truck efficiency could be hampered. However, Dangote's investment reportedly falls within the $250–280 million range for trucks and stations, showing a serious commitment to making it work. What people are saying The reaction from independent fuel marketers has been mixed. While some see opportunity in cheaper supply, others feel threatened. PETROAN (Petroleum Products Retail Outlets Owners Association of Nigeria) has warned that the direct delivery model may 'wipe out' smaller players who rely on older, more costly supply chains. Many worry about job losses, increased consolidation, and an eventual squeeze on competition. Yet, Dangote's supporters argue that he's simply making the system more efficient. 'If other players can't compete, that's not his fault,' one industry observer told us. 'This is what deregulation is supposed to look like.' So far, the federal government has not issued a formal response to Dangote's CNG rollout. However, there's speculation that regulators may need to intervene if competition concerns escalate. They could establish new guidelines for downstream market conduct or offer incentives to assist other players in transitioning to CNG. There's also an expectation that the government may publicly endorse the environmental angle, since reducing diesel reliance aligns with Nigeria's climate goals. What it all boils down to For you at the pump: Expect more stable or possibly lower prices, despite global oil volatility. For factories and telecoms, fuel is a significant portion of their energy budget. Cutting delivery costs frees up resources for lower production costs. For smaller fuel players: They'll need to innovate, partner up, or risk being squeezed out. For the economy: lower fuel costs could translate to increased production, higher employment, and additional tax revenue for government coffers. Final takeaway Dangote is using its scale and control over transportation to beat inefficiencies. He knows that if logistics costs decrease at the pump, his market share and profits will increase. The big test starts August 15. Will consumers see the savings on their receipts? Will rural areas get the same fuel price as Lagos? And can smaller operators find a way to keep up?
Zawya
20-06-2025
- Business
- Zawya
Nigeria: Dangote blames shortage of domestic crude oil for reliance on imports from US
The President of Dangote Group, Alhaji Aliko Dangote, has blamed shortage of domestic crude oil for the major reason Dangote refinery increasingly relied on imports from the United States to meet its needs in recent months. Dangote stated this during the tour of the facility by the Technical Committee of the One-Stop Shop (OSS) for sale of crude and refined products in naira initiative. He applauded the technical committee for its role in supporting the implementation of President Tinubu's laudable Naira-for-Crude initiative. He also commended the positive impact of the naira-for-crude swap deal on the Nigerian economy, noting that it has led to a reduction in petroleum product prices, eased pressure on the dollar, and ensured the stability of the local currency, among others. However, he noted in a statement: 'Due to a shortage of domestic crude oil, the refinery has increasingly relied on imports from the United States to meet its needs in recent months.' He stressed the importance of bold investment in strategic sectors as a key to industrialisation, revealing that building the refinery required extensive infrastructure development, including a world-class, self-sufficient marine facility capable of accommodating the largest vessels globally. He assured the delegation of the refinery's commitment to national development. Designed to process a wide range of crude types, including African and Middle Eastern grades as well as US Light Tight Oil, the refinery has the capacity to meet 100 per cent of Nigeria's domestic demand for petrol, diesel, kerosene and aviation jet fuel, with a surplus available for export. The $20 billion Dangote Petroleum Refinery & Petrochemicals was described as 'a symbol of industrial revolution, driving Nigeria's economic emancipation' by the Technical Committee of the One-Stop Shop (OSS) for sale of crude and refined products in naira initiative during the tour of the facility on Tuesday. Coordinator of the OSS Technical Committee, Mrs Maureen Ogbonna, who led the delegation, described the refinery as a breath of fresh air, impacting virtually every sector of the economy. 'This refinery touches all our lives. There's scarcely any sector unaffected. From pharmaceuticals to construction, food to plastics, this project is transformational. God has used the President of the Dangote Group to liberate Nigeria. I see this as the beginning of an industrial revolution,' she said. Noting that, in line with President Bola Tinubu's vision of achieving full domestic sufficiency in petroleum products and positioning Nigeria as a major global exporter, the committee is committed to eliminating regulatory, operational and logistical barriers that hinder the smooth supply and sale of domestic crude oil and refined products in naira. Reflecting on the scale and sophistication of the facility, Ogbonna, who had visited during construction and more recently alongside the leadership of the Nigerian Ports Authority, expressed continued awe at its execution. 'It is truly mind-blowing that one man could envision and execute such a project. As we toured the refinery, we thought we had seen everything until we reached the laboratory. That lab alone is an institution. I don't know of any institution in Nigeria or even globally that boasts such a laboratory for petrochemical,' she said. Applauding the engineering feat, Ogbonna urged Dangote to remain focused and undeterred by detractors, emphasising that the project is a global achievement, not a personal enterprise. 'We feel truly honoured to have been warmly received by the President of the Dangote Group and his team. My advice to him is: do not be discouraged by critics. He was never self-centred. Despite the obstacles, he was driven by a vision for Nigeria's future, reaching far beyond Africa,' she added. Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (
Business Insider
20-06-2025
- Business
- Business Insider
Dangote's growing reliance on U.S. crude tied to Nigeria's supply failures
Aliko Dangote, President of the Dangote Group, says his refinery is increasingly depending on crude oil imports from the United States due to Nigeria's failure to meet domestic supply commitments. Aliko Dangote states his refinery increasingly relies on U.S. crude imports due to Nigerian supply challenges. Despite being Africa's largest oil producer, Nigeria has struggled to meet domestic crude supply commitments. The Dangote Refinery has diversified its sources, importing crude grades from the U.S., Angola, and Algeria. Despite being Africa's largest oil producer, Nigeria has struggled to consistently provide crude feedstock to the 650,000-barrel-per-day Dangote Petroleum Refinery, forcing it to look abroad to sustain operations. The Dangote Refinery recently hosted Mrs. Maureen Ogbonna, Coordinator of the Technical Committee of the One-Stop Shop for the Sale of Crude and Refined Products in Naira initiative, during an official visit to the facility. Ogbonna, who led a delegation to the refinery, described it as ' a breath of fresh air ' with a transformative impact across virtually every sector of the Nigerian economy. While applauding the technical committee's role in supporting President Bola Tinubu's naira-for-crude initiative, Aliko Dangote praised the policy's positive effect on the economy. He noted that the crude-for-naira swap deal has helped lower petroleum product prices, reduced pressure on the U.S. dollar, and contributed to stabilizing the local currency. However, Dangote acknowledged that due to ongoing shortages of domestic crude oil, the refinery has increasingly had to rely on imports from the United States in recent months to sustain operations. As a result, U.S. suppliers have become a key fallback, highlighting both Nigeria's supply gaps and the growing role of international markets in sustaining one of Africa's largest energy investments. Dangote's dependence on foreign crude According to the National Bureau of Statistics (NBS), Nigeria spent ₦1.19 trillion on crude oil imports in the first quarter of 2025, making it the country's third most imported commodity during the period—despite being Africa's top oil producer. The contradiction highlights persistent supply gaps to local refineries, especially the Dangote Petroleum Refinery. Findings show that the Dangote Refinery is projected to import 17.65 million barrels of crude oil between April and July 2025, beginning with about 3.65 million barrels already delivered over the past two months, amid ongoing allocations under the Federal Government's naira-for-crude policy. As of March 2025, the refinery had received over three million barrels of U.S. crude in a single month, according to Bloomberg. Beyond American crude, the refinery has diversified its sources by importing Angola's Pazflor grade and Algeria's Saharan Blend, both supplied by Glencore Plc.
Russia Today
19-06-2025
- Business
- Russia Today
Crudely choked: Why must this nation struggle to refine its own oil?
The Dangote Petroleum Refinery in Nigeria, one of the largest oil refineries in the world, with a capacity of over 600,000 barrels per day (accounting for 0.5% of global refining capacity), is well-known beyond Africa thanks to global media reports. Initially, the media discussed this ambitious vision of Africa's richest man, Aliko Dangote, who aimed to tackle the fuel shortage in his home country by building a $20 billion oil refinery. Later, there were reports about construction delays and bureaucratic hurdles; after the refinery was finally launched in May 2023, stories emerged about conflicts between Dangote and the Nigerian government regarding oil and gasoline prices. The refinery's significance has been noted by the Economic Community of West African States (ECOWAS), which has referred to it as a 'beacon of hope' for the struggling regional market. Nigerian President Bola Tinubu, who visited the facility on June 6, called it 'a great phenomenon of our time.' However, the Dangote Refinery also serves as an example of the challenges that many African nations (many of which are not as wealthy as Nigeria) face on their path to economic prosperity, industrialization, and self-sufficiency. Fuel and petroleum products are essential commodities for any economy. They are critical for the operation of transportation infrastructure and energy systems, and play a vital role in industries and construction. Despite the fact that Africa exports at least 4.7 million barrels of oil per day, it still finds itself importing approximately 2.8 million barrels per day, incurring costs of around $100 billion each year. Paradoxically, Nigeria – one of the largest exporters and producers of oil, a member of OPEC and OPEC+ – until recently had been forced to import refined petroleum products (about 500,000 barrels per day). Nigeria's oil refining sector emerged in the 1970s-1980s and had a peak capacity of around 500,000 barrels per day; however, it suffered considerable decline in the 1990s and 2000s due to liberalization and market reforms. Equipment became outdated, and the government spent over a decade unsuccessfully searching for foreign investors to modernize the old refineries. International traders, exporters, trading cartels, and local business associates benefit from keeping countries reliant on imported petroleum products, and reap stable profits from trading margins. The bulk of profits in oil trading comes not just from differences in raw material costs, but also from ancillary operations like hedging, insurance, chartering, transportation, and transshipment. These logistical and financial services form the backbone of global trading business models. This means that the emergence of a domestic refining industry and the launch of oil refineries are detrimental to their interests. Both formal pressure (such as WTO regulations) and informal methods (involving corruption) have been employed to stifle projects aimed at enhancing Africa's domestic oil refining capabilities. Nigeria stands as one of Africa's most developed nations, boasting a population of over 200 million, a growing economy with a robust domestic capital market, and its own billionaires; this allows the country to take the first (even if still unstable) steps toward energy sovereignty. Local businesses, possessing a deeper understanding of African market dynamics, have the potential to drive growth in regional trade and industry. This context sheds light on the construction and launch of Africa's largest oil refinery, owned by Aliko Dangote, the wealthiest person in Africa, whose net worth is estimated at $23 billion. The project is indeed impressive: the Dangote Refinery accounts for about 0.5% of the world's oil refining capacity and over a quarter of all refining capacity in Africa. The project is valued at more than $20 billion and features a high-tech facility equipped with state-of-the-art equipment from around the globe. It produces a wide range of petroleum products, including gasoline, diesel, jet fuel, kerosene, liquefied petroleum gas (LPG), propane, butane, bitumen, naphtha, and fuel oil. This refinery should reduce Nigeria's dependence on imported petroleum products, which cost the nation over $22 billion annually. However, despite being operational for two years, the refinery has faced numerous challenges, particularly pushback from various industry players. In a rather absurd twist, the refinery has been forced to import crude oil from the US instead of sourcing it from local producers. This situation has arisen because multinational corporations like Shell, Chevron, ExxonMobil, and Total, from which the Nigerian National Petroleum Company (NNPC) offtakes crude, prefer exporting crude, since prices are higher in international markets, allowing for greater profit margins. These companies invest in expensive deepwater fields offshore, and export directly to Europe and China. Meanwhile, smaller Nigerian companies operating on less lucrative onshore fields often struggle with technological and financial limitations; this worsens access to crude in the domestic market. Furthermore, for the past two decades, the market has remained rudimentary, with minimal demand for crude due to the lack of local refining capacity. Aliko Dangote's influence has so far enabled him to secure the necessary preferences that benefit the entire domestic market. In 2024, a 'naira-for-crude' deal was introduced, requiring oil producers to sell a portion of their crude oil on the domestic market in naira [the local Nigerian currency]. This measure aims to stabilize the national currency, reduce dollar demand, and foster the growth of the local oil refining sector. Such a model promotes value-added growth within the country, supports import substitution, and could lay the groundwork for an independent fuel sector free from external supply chains. However, this strategy doesn't benefit everyone. The mandatory sale of crude in naira decreases profitability for oil producers, especially multinational companies that rely on foreign currency payments. These tensions led to a temporary suspension of the program, but in April, it was reinstated. A recent visit by a delegation led by President Bola Tinubu to the refinery indicates that some of these conflicts have been resolved. The launch of a major project like the Dangote Refinery creates a cumulative effect that extends well beyond a single industry. It helps build a domestic market not just for petroleum products, but also for crude oil, fundamentally altering the structure of supply and demand within the country. In order to ensure the sustainable utilization of such capacities, the government is reevaluating its economic policies: it is granting meaningful incentives to local businesses, establishing supportive mechanisms like 'naira for crude,' and increasing pressure on foreign investors to redirect a portion of their production to the domestic market. All these efforts contribute to strengthening the naira by lowering demand for foreign currencies, stabilizing the balance of payments, and fostering the development of local production and financial systems, thus strengthening the country's economic sovereignty.
