Dangote Petroleum Refinery is reducing its crude imports from the United States and increasing its use of Nigerian oil for processing, according to a Bloomberg report.
The refinery plans to source over 80% of its feedstock from domestic sources in the third quarter, up from less than 75% in the previous quarter.
This shift may lead to more US export barrels competing for buyers elsewhere.
Interestingly, oil prices were affected last month by reports that the plant intended to resell some of the US barrels it had previously purchased.
Dangote Refinery’s move to reduce overseas crude purchases may lead to more US export barrels competing for buyers elsewhere.
This shift could accelerate in the coming months as the Federal Government starts selling crude in local currency to Dangote from October 1.
Although it’s uncertain how much supply will be traded under this system, if the 450,000 barrels meant for local consumption are exhausted, Dangote might not need to import much overseas crude.
The Dangote refinery in Lekki, Lagos, a $20 billion investment, has made significant strides since December, processing over 56 million barrels of crude oil.
A substantial 78% of the crude oil supply has been sourced locally.
Nigerians can look forward to seeing Dangote’s petroleum products on the market as early as September, marking a significant milestone in the company’s efforts to boost local fuel production and reduce reliance on imports.”
