Decline in Crude Oil Intake
The Dangote Petroleum Refinery has been reported to have reduced its crude oil purchases in October as operational setbacks continued to slow output and strain local fuel supplies.
According to vessel-tracking data and cargo allocation lists cited by Bloomberg, fewer than 300,000 barrels of crude oil per day are expected to be purchased this month — representing less than half of the refinery’s 650,000-barrels-per-day capacity and a sharp decline from the 600,000 barrels per day recorded in July.
Persistent Operational Setbacks
Since commencing operations in 2024, the $20 billion Lekki-based facility has reshaped oil markets in West Africa and beyond. However, frequent unplanned outages, worker-related disruptions, and suspected sabotage during internal restructuring have hindered its performance.
A three-day national strike in late September, triggered by layoffs, was said to have resulted in the loss of about 600,000 barrels of production, according to the Nigerian National Petroleum Company Limited (NNPC).
Impact on Fuel Supply and Regional Prices
With reduced output, fuel supply across Nigeria and other African countries has been tightened, exerting upward pressure on petrol prices. Analysts have warned that the situation may persist into next year, keeping gasoline prices elevated.
“European gasoline has been extremely strong as a result of Dangote’s issues,” said Neil Crosby, an analyst at Sparta Commodities, noting that reduced African exports have strengthened the European gasoline market in recent weeks.
Composition of Crude Supply
The refinery’s crude feedstock for October has been estimated at 287,000 barrels per day, comprising 153,000 barrels of Nigerian crude and additional volumes from the United States.
About 150,000 barrels per day of feedstock will be supplied by NNPC under a recently agreed naira-for-crude supply deal, with similar allocations planned for November.
However, traders have noted that the refinery has not placed any new orders for U.S. West Texas Intermediate crude for November delivery — another signal of slowed import demand.
Maintenance and Technical Difficulties
Major technical issues have been observed in the refinery’s gasoline-making units. The residue fluid catalytic cracker (RFCC), a key component in fuel production, was expected to restart this week after being shut since late August.
Intelligence firm IIR Energy reported that substantial maintenance work remains to be completed, and the unit may face another shutdown early next year for major repairs.
Analysts at FGE NexantECA have expressed doubts about the refinery’s ability to sustain high operating rates through 2026.
“It is likely that Dangote will continue to face issues next year, albeit to a lesser extent than this year,” said Qilin Tam, Head of Refining at FGE NexantECA. He added that unscheduled outages could add a bullish sentiment to the gasoline market ahead of the next driving season.
Broader Market Implications
The operational slowdowns at the Dangote refinery have been reflected in stronger European gasoline prices and have also influenced global crude trade flows.
According to Wood Mackenzie Ltd., further setbacks could reduce crude runs and lead to a shift toward lower-value fuel oil production rather than gasoline.
“Such a scenario could boost Dangote’s exports of fuel oil to Asia while keeping European gasoline exports flowing to West Africa,” said Alan Gelder, Wood Mackenzie’s Vice President of Refining, Chemicals, and Oil Markets.
Outlook
Although analysts believe that refinery run rates may improve once technical issues are resolved, uncertainty remains over when full operations will be restored.
A senior executive at Dangote Industries Limited declined to comment on the refinery’s current status or its future maintenance plans.
For now, the refinery’s reduced crude intake continues to shape the regional fuel supply outlook, reinforcing its influence on African and global gasoline markets.
Reference: OrientalNews PunchNG