Local airlines under the aegis of the Airlines Operators of Nigeria and local producers on the platform of the Manufacturers Association of Nigeria have begun plans aimed at getting Dangote Petrochemical Refinery to priotise diesel and JetA1 supplies to local carriers and manufacturers.
The move came about one week after indication emerged that the Dangote refinery’s diesel and aviation fuel would hit the market by January 2024. This was after about one million litres of crude oil was supplied to the facility.
Months earlier, the Dangote refinery had hinted that refined petroleum products would from the facility be sold in the international market.
But in a brief chat with one of our correspondents on Sunday, the Chairman of United Nigeria Airlines and spokesperson for AON, Prof. Obiorah Okonkwo, said local carriers had begun talks with the management of the refinery, expressing hope that the talks would be fruitful.How Lawyer Was
“We are talking with him and hope that it will be fruitful,” Okonkwo said while responding to an enquiry on whether local airlines had plans to begin talks on JetA1 supply with the Dangote refinery.
Also, MAN said its members were meeting with the aim of coming up with a position for possible presentation to the Dangote refinery management.
MAN President, Francis Meshioye, told one of our correspondents that the association was meeting to determine whether an arrangement would be made with Dangote Refinery on the supply of diesel to its members.
Aligbe said, “Fuel is the highest single cost factor in airline operation, so, when we have such things skyrocketing, the airlines will be in a very terrible situation.
“They will take a beating and transfer the cost to the passengers, otherwise, they won’t survive. No one expects the local airlines to bear that burden without passing it on to their passengers. That’s the situation we find ourselves in.”
Dangote schedules supply
Meanwhile, the production of Automotive Gas Oil, popularly called diesel, and JetA1 or aviation fuel, from Dangote Petroleum Refinery in January 2024 is going to be supplied to domestic airlines and industries operating in Nigeria, it was gathered on Sunday.
Recall that The PUNCH exclusively reported last week Monday that the $20bn refinery would start producing diesel and Jet A1 in January 2024, while the production of Premium Motor Spirit, popularly called petrol, was being delayed by the supply of crude oil in installments.
Officials of the facility confirmed to one of our correspondents on Sunday that the two products that would be pumped from the refinery next month would be supplied domestically, as against speculations that the plant would export the commodities.
There had been concerns and speculations that the products from the Dangote refinery were basically meant for export, as the firm operates from an export-free zone in Lagos.
The Dangote Petroleum Refinery and Petrochemical Project, a subsidiary of Dangote Industries Limited, is a 650,000 barrels per day crude oil refinery, located in Dangote Industries Free Zone, Ibeju-Lekki, Lagos, Nigeria.
Dangote Petroleum Refinery with the capacity to refine 650,000 barrels of crude oil per day covers an area of approximately 2,635 hectares and is located in the Lekki Free Trade Zone in Lagos.
But officials of the firm denounced speculations that the products to be pumped by the refinery in January would be exported without serving the domestic market, a development that got the commendations of oil marketers.
The marketers also stated that once the Dangote refinery starts producing diesel and aviation fuel, and the Port Harcourt Refinery Company, under the management of the Nigerian National Petroleum Company Limited, begins operations in December/January, the cost of refined products would drop.
When contacted on Sunday and asked whether the Dangote refinery would start with a domestic supply of diesel and aviation fuel once it starts producing in January, or if it would start with the international market, the senior official at the firm replied, “With Domestic supply, of course.”
The official, who pleaded not to be named due to lack of authorisation to speak on the matter, noted that the company would definitely feed its international customers, but stressed that the firm would first supply aviation fuel to domestic airlines.
The source further noted that “diesel is going to be served to indigenous companies first before export.”
“The emergence of functional modular refineries in their numbers in Nigeria is long overdue. We cannot continue to import products when we can build or have modular refineries to help refine some of our crude oil. Now the subsidy on petrol has been reduced, let the modular refineries work,” he stated.
The Dangote refinery would require a minimum of six million barrels of crude oil to kick-start the full production of refined petroleum products including AGO, PMS, Jet A1 and Dual Purpose Kerosene, otherwise called kerosene.
But what the refinery got about two weeks ago was one million barrels of crude, while the remaining five million barrels would arrive at the $20bn facility in another five installments.
On November 2, 2023, The PUNCH reported that the failure to supply crude oil to domestic refineries, including the multi-billion dollar Dangote Refinery, stalled the production of refined petroleum products at the facilities.
The report also stated that the lack of crude oil supply came as the 650,000 barrels per day Dangote Refinery in Lagos missed the October production projection it had earlier set.
It pointed out that the October production target miss made it the second time in 2023 that Dangote Refinery would raise hopes in Africa, especially Nigeria, of a possible end to petrol importation.
Following The PUNCH’s report, the Nigerian National Petroleum Company Limited swiftly declared the next day being November 3, 2023, that it was set to provide six million barrels of crude oil to the Dangote Refinery. It, however, has yet to do so.
But two weeks ago, the management of Dangote Refinery confirmed the receipt of one million barrels of crude oil, adding that this would lead to the production of refined products at the facility.
“In a major step towards boosting Nigeria’s domestic refining capacity and attaining energy security (self-sufficiency), Dangote Petroleum Refinery and Petrochemicals plant has purchased one million barrels of Agbami crude grade from Shell International Trading and Shipping Company Limited, one of the largest trading companies in Nigeria as well as globally, trading over eight million barrels of crude oil per day,” the oil firm had stated.
