As Refinery slashes Price of Diesel by 60% in Nigeria….
By Olawale Lamina
Asia’s oil hub, Singapore, will be receiving its first low-sulphur straight-run fuel oil cargo exported from Nigeria’s new Dangote refinery this week, says report by ship-tracking data and market sources
The development will open a new vista of a new trade flow from the newly-commissioned Nigeria’s privately owned refinery to Asia, a region that is structurally short on low-sulphur fuel oil required to meet demand for ship refuelling at the world’s largest bunker hub Singapore.
Recall that Dangote refinery, the single largest private owned in Africa, commenced production in January,with estimated $20 billion cost to build.
The refinery has the capacity to produce up to 650,000 barrels per day of fuel and will be the largest, not only in Africa but Europe when it operates to full capacity.
The refinery has been exporting more LSSR since March, with most of these cargoes landing in America and Europe so far, ship-tracking data from Kpler and Vortexa showed.
According to a report by Hindustan Times, the first such cargo to Asia from Nigeria is scheduled to arrive on Wednesday, with the Glencore-chartered vessel Front Brage carrying about 124,000 metric tons of LSSR to Singapore.
Additionally, some market sources said the cargo was sent to Asia due to a much weaker market in Europe. The front-month 0.5% LSFO east-west spread, which is the difference between prices in the East versus the West, remained above $40 a ton this week, LSEG data showed.
Similarly, some market sources observed that Dangote’s LSSR cargoes are typically priced at a differential to Rotterdam 0.5% LSFO quotes on a free-on-board basis, although the differential was not immediately known.
Meanwhile, ship-tracking data has revealed that, another LSSR cargo from Dangote containing about 157,000 tons is being expected to berth at Singapore on vessel Stena Suede in July.
Dangote Refinery began issuing tenders to sell oil products for export in February 2024. The refinery also started buying crude in December 2023, with the NNPCL as its major supplier.
We have slashed the price of diesel by over 60% in Nigeria – Dangote
Back home, Aliko Dangote, Africa’s richest man has declared that supply of diesel from his Dangote Refinery is currently responsible for about 60% decrease in the product’s price in the local market.
At The Bahamas on Wednesday, Dangote stated in his address during the Afro-Caribbean Trade & Investment Forum in Nassau,
He informed his audience that prior to the time that the Dangote Refinery commenced operations, diesel was sold at around N1,700. But, the refinery succeeded in reducing the price to about N1,000, marking a drop of approximately 60%.
Aliko Dangote further stated that, despite the exchange rate climbing up to N1,500 per dollar, the company managed to keep the price of diesel, known as LGO below N1,200.
He remarked that, “The issue of gasoline is certainly a different issue. That is being dealt with by the government.
Nigeria’s Strategic Petroleum Reserves
Again, the business mogul pointed out that currently, the county cannot boast of a strategic reserve for petroleum products, a development he considers unhealthy for a country with over 200 million population.
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