Has the Dangote Refinery begun to change product flows?

It has been four months since the Dangote Refinery began operations with approximately 5.4 million tonnes of petroleum products i.e. Fuel Oil, Naphtha, Gasoil and Jet exported from the refinery until date.

Crude supply to the refinery has been coming mainly from terminals in Nigeria and imports from the United States. According to sources the refinery is expected to commence production of gasoline at the end of May 2024, as against the last quarter of 2024 which was the time predicted by many analysts.

These flows are expected to change the Trans-Atlantic distillate trades in the medium to long term such as gasoline exports from West Africa to the United States and ultra-low sulphur diesel (ULSD) to Europe, which would see European product imports into West Africa decline.

Rates for cross West Africa voyages continue to increase week on week with the Nigerian cabotage market being particularly tight with limited Handy/MR availability.

Despite this high demand, petrol queues are still witnessed in many parts of the country, even though PMS stock offshore Lagos has increased with recent arrivals reaching close to 382,000 metric tonnes.

Logistical challenges are currently responsible for slow discharge offshore Lagos which has seen stock levels rise. We are now seeing rates getting closer to the high peaks witnessed in May 2023 where 15,000 metric tons to 20,000 metric tons Lagos to Lagos fixing at $57,000 per day, with current rates fetching between $54,000 per day to 55,000 per day for the same route.

This is an extract of the Riverlake Weekly Outlook. You can see more visiting clicking here.