Nigeria’s new Dangote oil refinery is boosting gasoil exports to West Africa, taking market share from European refiners. Traders and shipping data confirm this shift.
The $20 billion refinery, still waiting for the restart of units needed for cleaner fuel production, is producing a lower grade of gasoil. This has led the refinery to seek buyers in neighbouring markets.
According to analytics firm Kpler, in May, the refinery’s gasoil exports reached nearly 100,000 barrels per day (bpd), almost doubling April’s levels. Most exports went to West African countries, with one shipment to Spain.
However, June’s preliminary data shows a significant drop in gasoil volumes. Overall oil product exports, including fuel oil, naphtha, and jet fuel, remained high at 225,000 bpd.
Decline in European Exports to West Africa
The refinery has shifted the market balance in West Africa, impacting European markets. Kpler data revealed EU and UK gasoil exports to West Africa fell to a four-year low of 29,000 bpd in May. Russian exports to the region also dropped to an eight-month low of 87,000 bpd.
Dangote has been selling some high-sulphur gasoil in Nigeria, leading to a dispute with local fuel retailers over responsibility for the dirtier fuel. The Petroleum Industry Bill 2021 mandated a sulphur content of 50 parts per million (ppm) to meet ECOWAS standards. However, the regulator allowed the sale of gasoil with sulphur content above 200 ppm locally until June, giving local refineries and importers more time to comply.
As European countries tighten regulations on high-sulphur gasoil exports, Dangote’s refinery has found markets in regions with more lenient standards.
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In May, Aliko Dangote, Chairman of the refinery, stated that when fully operational, the refinery will supply products to West and Central African countries as its capacity exceeds Nigeria’s needs.
This decline in European gasoil exports to West Africa supports earlier reports suggesting the refinery could reduce the continent’s $17 billion in oil imports and potentially close some European refineries. In 2023, West Africa became the largest regional recipient of Europe’s gasoline exports, receiving about one-third of the continent’s average exports, totalling 1.33 million bpd.
