THERE are fears that the coming on stream of $20 billion Dangote oil refinery could diminish decades-long gasoline shipments from Europe to Africa worth $17 billion annually, The Courage.
Traders and analysts said the operations of the refinery would put pressure on European refineries already at risk of closure from heightened competition.
According to Reuters, the refinery can refine up to 650,000 barrels per day (bpd) and will be the largest in Africa and Europe when it reaches full capacity this year or next.
The agency said it has long been touted as the turning point for Nigeria’s quest for energy independence, adding that Nigeria is Africa’s most populous nation and its top oil producer, yet it imports almost all its fuel due to lack of refining capacity.
About a third of Europe’s 1.33 million bpd average gasoline exports in 2023 went to West Africa, a bigger chunk than any other region, with the majority of those exports ending up in Nigeria, Kpler data shows.
“The loss of the West African market will be problematic for a small set of refineries that do not have the kit to upgrade their gasoline to European and U.S. specification,” consultancy FGE’s head of refined products Eugene Lindell said, referring to more stringent environmental standards for other markets.
As much as 300-400,000 bpd of refining capacity in Europe is at risk of closure because of rising global gasoline production, according to Kpler’s analyst Andon Pavlov. A European refinery executive who declined to be identified said coastal refineries that are geared for exports will be more exposed while inland refineries are less vulnerable because they rely on local demand.
