Dangote Refinery’s Impact on Europe’s PMS Market Highlighted by OPEC

 

Dangote Refinery’s Impact on Europe’s PMS Market Highlighted by OPEC

The Organisation of the Petroleum Exporting Countries (OPEC) has noted that the Dangote Petroleum Refinery and its efforts to boost Premium Motor Spirit (PMS) production are influencing the European PMS market.

The 650,000-barrel-per-day Dangote refinery, which began operations in January of the previous year, started producing PMS in September. This marked a significant shift for Nigeria, which had previously depended entirely on fuel imports to meet domestic demand.

Since commencing production, the refinery has exported petrol, diesel, and aviation fuel to countries both within and outside of Africa.

Reduced European Exports to Nigeria

In its report released on Wednesday, OPEC observed that the Dangote refinery’s emergence has significantly curtailed the importation of petroleum products from Europe to Nigeria.

OPEC stated:

"The ongoing operational ramp-up efforts at Nigeria’s new Dangote refinery and its gasoline exports to the international market will likely weigh further on the European gasoline market.

Continued gasoline production in Nigeria, a country that has relied heavily on imports to meet its domestic fuel needs in the past, will most likely continue to free up gasoline volumes in international markets, requiring adjustments to flows and destinations for the surplus volumes going forward."

Declining Imports and Market Adjustments

In the final quarter of 2024, OPEC reported a notable decline in oil product imports into Nigeria, improving the external sector’s outlook.

The report also highlighted an increase in the gasoline crack spread in Rotterdam against Brent, driven by strong exports, despite high inventories at the Amsterdam-Rotterdam-Antwerp storage hub. It predicted that gasoline inventory levels would likely continue to rise in the coming months due to seasonal demand pressures in the Atlantic Basin.

OPEC warned that the ongoing recovery in gasoline refinery output could exacerbate bearish market sentiment.

Nigeria’s Crude Production

The Monthly Oil Market Report revealed that Nigeria’s average daily crude production reached 1.507 million barrels in December, based on secondary sources. This represents an increase of 12,000 barrels per day (bpd) compared to November’s 1.477 million bpd. However, data from the Nigerian government indicated a slightly lower figure of 1.485 million bpd for December, which aligns with the Nigerian Upstream Petroleum Regulatory Commission’s records.

Dangote Refinery Outranks Europe’s Largest Refineries

The Dangote refinery, with a $20 billion investment, has been ranked ahead of the 10 largest refineries in Europe based on capacity, according to Bloomberg data.

The refinery’s 650,000 barrels-per-day capacity surpasses Shell’s Pernis refinery in the Netherlands, which has a capacity of 404,000 bpd and is Europe’s largest.

Other notable refineries listed include BP Rotterdam in the Netherlands (380,000 bpd), GOI Energy ISAB in Italy (360,000 bpd), TotalEnergies Antwerp in Belgium (338,000 bpd), and Shell’s Rheinland refinery in Germany (327,000 bpd).

This development marks a major milestone for Nigeria, positioning the Dangote refinery as a game-changer in global petroleum markets.