Dangote oil refinery has began gasoil exports to West Africa, capturing market share from European refiners, according to traders and shipping data.
The $20 billion refinery is currently producing a lower grade of gasoil than anticipated as it awaits the restart of units necessary for producing cleaner fuels.
According to Reuters, as a result of this, the refinery is seeking buyers in neighbouring markets.
The report, quoting data from analytics firm, Kpler, indicated that in May, gasoil exports from the refinery reached nearly 100,000 barrels per day (bpd), almost doubling April’s levels.
It said m toost of these exports were directed to other West African countries, with one shipment sent to Spain.
However, preliminary data for June shows a significant drop in gasoil volumes, although overall oil product exports, including fuel oil, naphtha, and jet fuel, remained relatively high at 225,000 bpd.
“The refinery has shifted the balance in West Africa,” impacting European markets, a European distillates trading source told Reuters.
Kpler data revealed that EU and UK gasoil exports to West Africa fell to a four-year low of 29,000 bpd in May, while Russian exports to the region dropped to an eight-month low of 87,000 bpd in the same month.
Dangote has been selling some high-sulphur gasoil in the Nigerian market, but a dispute has arisen with local fuel retailers over who is responsible for selling the dirtier fuel.
The Petroleum Industry Bill passed in 2021, mandated a sulphur content of 50 parts per million (ppm) to align with the sub-regional ECOWAS standards adopted in 2020.
However, the regulator permitted the sale of gasoil with sulphur content above 200 ppm locally from the beginning of the year until June, allowing local refineries and importers more time to comply with the new standard.
As European countries, including major hubs like Belgium and the Netherlands, tighten regulations on high-sulphur gasoil exports, cargoes from the Dangote refinery have found markets in regions with more lenient motor fuel standards.
