Abuja – In a historic business transaction, Dangote Oil Refinery announced yesterday that the US imported more than 2 million barrels of jet fuel from 650,000 BPD facilities in March alone, highlighting the growing global impact of the world’s largest single refinery in Lagos.
Trade analysts say the Dangote refinery entrance to the US market is expected to see jet fuel reach two-year highs this month, lowering the peak prices of the summer travel season.
Data from Kpler’s ship tracking service, mentioned in a statement from the Dangote refinery, showed that six vessels carrying around 1.7 million barrels of jet fuel from the refinery that arrived at US port this month, another vessel, Hafnia andromeda, will arrive at the end of the Everglades on March 29th.
The cargo to the US follows Dangote Refinery’s export of a total of approximately 130 million litres of jet fuel from Nigeria to Saudi Arabia.
Jet fuel cargo to the US is believed to be able to challenge the economy of domestic producers in the world’s largest fuel consumer.
Tanktiger Chief Operating Officer Steven Barsamian’s Midstream Logistics and Independent Brakerage and Consulting Clearing House has confirmed that US jet fuel prices are likely to fall ahead of the peak summer travel season.
“The surge in demand, driven partially by supply inflows from Nigeria, is expected to lower US jet fuel prices ahead of the peak summer travel season,” he said.
It was learned as the demand for leasing jet fuel storage tanks in Houston and New York Ports averaged around 700,000 barrels, five to six times the average monthly demand. US jet fuel imports in March averaged around 226,000 bpd, the highest since February 2023, highlighting global demand for products from Dangote refineries.
The Dangote refinery, which began production in January 2024, has already exported its products to almost every continent.
The surge in US imports was partially triggered by a maintenance-related shutdown at the Phillips 66 Bayway refinery in New Jersey, but analysts believe Dangote’s product selection highlights its presence in international markets that competed with European refiners in gasoline exports.
Dr Muda Yusuf, economist and chief executive officer of the Private Enterprise Promotion Centre (CPPE), said Dangote refinery’s export of jet fuel to the US is a point of pride for Nigeria, highlighting the quality, standards and trust that the international community places in refineries.
“As a country, we cannot be more proud of us than the fact that we currently have refinery-produced products that can be exported to the United States. It trusts the quality, standards and international community to have at Dangote refinery.
The Director-General of the Industrial Industry and Industry of Lagos Chamber of Commerce (LCCI) also emphasized that the Dangote refinery is increasing Nigeria’s position on the global stage and should be supported by both citizens and government.
“That’s why we all (citizens and government) should do everything to support refineries as they have broken many barriers and are building our country’s reputation. The lesson here is that we need to support Dangote refineries and other refineries with similar capabilities,” he added.
Commenting on business transactions, Dr Abimbola Oyalinu, a public policy expert, said that if they had a functional refinery in the past, rather than exporting crude oil when importing sophisticated petroleum products, the Nigerian economy would be better than it is today.
“This is something we should have addressed after 2014. If things were working, we wouldn’t have reached this point.
“The Dangote refinery not only reduces foreign exchange outflows, but also brings forex. Despite this, it is unfortunate that some elites and powerful people are still intended to sabotage the refineries and Dangote himself,” he said.
The university lecturer also warned that lack of ease of business and dissatisfaction with local investments could discourage future investors.
“This is something the country should be proud of. We previously had a thing economy that relied solely on oil exports, but Dangote helped diversify the sector by selling finished products to international markets. He asked.
Meanwhile, the Nigerian Manufacturers Association (MAN) has said that polypropylene production by refiners will revive Nigeria’s struggling textile industry, saving $267 million in import costs.
In a television interview, Man, Director of Segun Kadir-Ajayi, highlighted the struggle of the textile industry, which thrived and employed more than 25,000 workers, ages 18 to 40, in the northern region alone.
He explained that many companies have been forced to close due to a lack of foreign exchange needed to import due to the lack of local polypropylene production.
He further said that Nigeria (equivalent to 250,000 metric tonnes), which currently imports 90% of the annual polypropylene requirements due to the production of polypropylene by Dangote refineries and petrochemists, will become a net exporter and will generate foreign exchange and strengthen the economy.
“For us in the manufacturing sector, this is a welcome development. It is more than covering the 250,000-meter tonnes that make up our national needs, and it is very short. You can imagine the sector that will affect us, the textile industry, the plastic industry, and the furniture industry.
“We are looking at a savings of $267 million, which is the amount spent annually to import these materials. This is a welcome development for manufacturers as it encourages investment in the sector,” he said.
Bemoaning how the collapse of the textile industry has led to widespread unemployment, Kadir-Ajayi said local production of polypropylene would no longer require manufacturers to rely on imported polypropylene. This will help reduce costs and improve efficiency, he added.
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“We have seen global trends in the textile industry that relies on the petrochemical industry, so we can imagine what this will bring to the sector.
“And now it’s available locally and that it doesn’t require us to continue looking for foreign exchange so that we can meet our demands. That’s cheering news for manufacturers,” he said.
He urged the federal government and other stakeholders to support local production of polypropylene through incentives, which attracts more investment in the sector and increases manufacturing’s contribution to gross domestic product (GDP). He added that this will greatly support the government’s goal of achieving a $1 trillion economy over the next few years.
Also yesterday, Dangote Oil Refinery issued a bid to sell 128,000 tonnes of residual fuel oil in April, according to a summary of the bid document shared by market sources with Reuters.
The refinery will close its bids at 1200 GMT on Wednesday (today). This is outlined as they are seeking 88,000 tons of low sulfur straight run fuel oil and 40,000 tons of slurry oil for loading on April 10-12.
Additionally, Dangote will close its 204,000 barrel gas production unit for 30 days on June 1 for tentatively expected maintenance, according to Industrial Monitor IIR.
Straight Run fuel oil is a raw material processed through a secondary refinery unit and is a product such as gasoline (gasoline) and diesel.
Dangote’s fuel oil exports averaged 75,000 bpd for the period from March to August 2024, but fell to 20,000 bpd from September, according to transport data analytics company Kpler.
