Nigeria's Dangote Refinery Unit to Resume Full Rates Mid-June After Production Cut

Nigeria's Dangote oil refinery has scaled back its gasoline production by 34% since May 21, according to industry monitor IIR Energy. The reduction stems from initial issues with lighter crude processing, leading to insufficient feed for the refinery's RFCC unit, and a subsequent problem with its flue gas slide gate valve. Repair work on the valve is nearing completion.

The refinery anticipates the gasoline-making unit will return to full rates by mid-June. However, the temporary dip in production capacity could exacerbate fuel supply challenges in Nigeria. Fuel prices have already surged to record highs, partly due to the ongoing conflict in the Middle East.

Since becoming fully operational earlier this year, the Dangote refinery, Africa's largest, was intended to transform Nigeria into a significant exporter of refined products. This goal was set against a backdrop of decades of insufficient domestic refining capacity. Data from commodities analytics firm Kpler shows a marked decrease in gasoline exports from the refinery, falling to 17,000 barrels per day in May and averaging 10,000 bpd so far in June, a sharp drop from April's highs of 81,000 bpd.

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Initially, lighter crude being processed resulted in insufficient feed availability for the RFCCU. However, ⁠by the end of May, IIR Energy confirmed that the RFCCU was also facing an issue with its flue gas slide gate valve. Repair work on that issue is almost complete.