Dangote Refinery Begins Test-Run of Petrol Production – Report

The Dangote Refinery has commenced a test-run of petrol production, marking a significant step toward full-scale operations in what is expected to boost Nigeria’s fuel supply and reduce import dependency

The Dangote Petroleum Refinery has initiated a production test-run of the Premium Motor Spirit (PMS) also known as petrol, and oil marketers are anticipating its price before its official release in September.

Reuters reported that the Dangote Petroleum Refinery is currently conducting trial runs for petrol manufacturing, and it’s anticipated to be fully operational by mid-September.

According to a note from IIR Energy, an oil industry monitor, the publication indicated that the date might be prolonged even more.

Real-time global market intelligence for commodity trading is supplied by IIR Energy.

On Thursday, our correspondent reached out to inquire about the matter from Anthony Chiejina of Dangote refinery who had not yet provided a response at that time.

The Major Energies Marketers Association of Nigeria and the Independent Petroleum Marketers Association of Nigeria stated that they were yet to receive information about the product’s cost from the $20bn plant.

This August 20th, the committee established by The Federal Government to oversee crude oil sales in naira for local refineries came to an understanding with Dangote Petroleum Refinery. They have agreed on a rollout of petrol starting this September.

According to the report, October 1st, 2024 will mark the start of crude oil sales by the Federal Government to Dangote Refinery and other local refineries.

During a meeting with the Implementation Committee in Abuja, Wale Edun – Minister of Finance and Coordinating Minister of the Economy – made an announcement.

During the meeting, it was reported by Dr Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service and also by the Technical Sub-Committee Chair that Dangote is expected to make its first PMS delivery under current arrangements next month.

When queried about the disclosure of PMS price to marketers, Mustapha Zarma, who is responsible for National Operations Control at IPMAN replied that oil dealers were yet to receive details regarding the refinery’s per litre petrol cost.

Zarma stated that currently there is no cost for the product and it will only be released when available. However, they are conducting test runs of their plants at present.

However, he highlighted the possibility that oil marketers may be unable to purchase petrol from Dangote refinery at a market price. This is due to his emphasis on PMS’ current pump price which remains lower than its corresponding actual market value.

Zarma explained that purchasing Dangote’s product is not possible even if a price from the refinery exists. Additionally, at the current retail price, their product remains inaccessible unless an agreement with the government or changes to petrol pricing policy occur.

The IPMAN representative emphasized that the Nigerian National Petroleum Company Limited had recently disclosed that the current pump prices of petrol in Nigeria were lower than its landing cost.

It was recently reported by MEMAN that the cost of landing petrol is approximately N1,117 per litre.

According to Zarma, Dangote will not lower the selling price of his product unless there is involvement from the government. The NNPC serves as Nigeria’s exclusive petrol importer and shoulders the cost subsidy for said product.

Alterations to dates.

On May 18, 2024, Alhaji Aliko Dangote – the President of Dangote Group – declared that their refinery will commence petrol production from June. His announcement also affirmed that Nigeria would no longer have to import this product.

He announced in June that the refinery would begin its petrol supply in July, albeit with a slight delay.

The targeted date for July was rescheduled to August, but eventually in August 20 the government declared that PMS from the plant would be released in September.

According to a MEMAN representative, the refinery is intentionally proceeding at a deliberate pace in order to guarantee that the product adheres to all necessary country-specific standards.

The official, who preferred to remain anonymous because they were not authorized to discuss the matter publicly, disclosed details about the plant’s PMS test-run.

According to him, products are typically not made in a bucket under regular circumstances. Instead, they are created for the purpose of filling large tanks as you’ll ultimately sell your merchandise via ships. Therefore, one must manufacture several millions of liters and thoroughly mix and examine it until it meets all necessary requirements.

When cooking soup, one tastes after adding salt and seasoning, gradually adjusting until reaching a desirable flavor. Similarly, blending continues until meeting the necessary specification.

Initially, you blend and mix the substance while conducting tests to ensure it meets the required specifications. If not, continue mixing until desired results are achieved by adjusting your refinery as necessary. Test again after blending further to guarantee conformity with regulations. Repeat this cycle of blending and testing till the ideal specification is reached before proceeding forward with production or usage purposes.