The Organisation of the Petroleum Exporting Countries (OPEC) has revealed that the emergence of the Dangote Petroleum Refinery in Nigeria is reshaping the global Premium Motor Spirit (PMS) market, especially in Europe. This comes as the refinery ramps up operations, causing ripple effects in international fuel trade patterns.
OPEC, in its latest report released on Wednesday, underscored that fuel production at the $20 billion Dangote Refinery is not only reducing Nigeria’s reliance on European fuel imports but is also compelling market readjustments globally.
“The ongoing operational ramp-up efforts at Nigeria’s new Dangote Refinery and its gasoline (petrol) exports to the international market will likely weigh further on the European gasoline market,” OPEC noted.
The organization highlighted the shift this development signifies, explaining that Nigeria, historically dependent on fuel imports to meet domestic demand, is now contributing excess gasoline volumes to international markets. “Continued gasoline production in Nigeria will most likely continue to free up gasoline volumes in international markets, which will call for new destinations and flow adjustments for the extra volumes going forward,” the report added.
Impact on Global Markets
Europe, a region once heavily relied upon to supply Nigeria with refined petroleum products, is now facing reduced exports to its former top buyer. This significant shift comes as the Dangote Refinery, located in Lekki, Lagos, began the production and rollout of PMS on September 15. With a daily production capacity of 650,000 barrels, the refinery is among the largest in the world, placing Nigeria at the forefront of international petroleum production.
“The reduction in importation by Nigeria is a sign of progress,” an energy analyst, Adeolu Ogunleye, said. “For decades, Nigeria’s heavy reliance on imported fuel strained its foreign reserves and stifled economic growth. This development not only signals a reversal but a historic rebalancing of global trade flows.”
In the final quarter of 2024, OPEC reported a decline in imports of oil products by nations globally. This improvement contributed to a more optimistic outlook for external trade among oil-exporting economies.
Domestic Fuel Price Adjustments
Back home, the Dangote Refinery’s operations are equally altering Nigeria’s PMS pricing landscape. In November, the refinery reduced its ex-depot price for petrol to ₦899.50 per liter, down from previous highs. This price slash, coupled with its strategic partnership with MRS filling stations, ensured that petrol could be sold at ₦935 per liter across various outlets.
This competitive pricing prompted a response from the Nigerian National Petroleum Company (NNPC), which lowered its PMS price to ₦965 per liter. As a result, Nigerians are now buying petrol within a range of ₦935 to ₦1,100 per liter nationwide.
“This is a significant relief for Nigerians, though more needs to be done,” said Faith Ikenna, a business analyst. “The downward pricing trend illustrates the competitive edge that Dangote Refinery is bringing to the table, and the benefits could be much greater if the government prioritizes deregulation and efficiency in the sector.”
A Transformational Moment for Nigeria
For a country long grappling with the challenges of a fuel subsidy regime and its economic repercussions, the operational success of the Dangote Refinery signals a new dawn. The move towards self-sufficiency in petroleum refining could free up substantial funds previously allocated to subsidies while curbing illegal oil exports that have plagued the sector.
“The Dangote Refinery represents an economic revolution for Nigeria,” said Samuel Obot, an economist. “We are moving from being a net importer to a net exporter of petroleum products. This is unprecedented and positions Nigeria as a major player in global markets.”
The refinery, which cost $20 billion to build, is expected to meet domestic needs while addressing international demand through its massive refining capacity. Observers believe this will increase foreign exchange inflows for Nigeria, boosting its economy and providing a stronger buffer against external economic shocks.