Latest news with #refining
Zawya
10 hours ago
- Business
- Zawya
Nigeria: Africa's losing $90bln annually to imported substandard fuel, Dangote laments
Africa is increasingly becoming a destination for cheap, often toxic petroleum products—many of which are blended to substandard levels that would not be permitted in Europe or North America. This concern was raised by the President/Chief Executive, Dangote Industries Limited, Aliko Dangote, during the ongoing West African Refined Fuel Conference held in Abuja. The event was organised by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and S&P Global Commodity Insights. Dangote revealed that, due to the continent's limited domestic refining capacity, Africa imports over 120 million tonnes of refined petroleum products annually, at a cost of approximately $90 billion. While appreciating the Management of the Nigerian National Petroleum Company Limited (NNPC), for making some cargoes of Nigerian crude available to the refinery from start of production to date, he revealed that the company, monthly import between 9-10 million barrels of crude from the United States of America and other countries. He said: 'As we speak today, we buy 9 – 10 million barrels of crude monthly from US and other countries. I must thank NNPC for making some cargoes of Nigerian crude available to us from start of production to date.' Dangote further stated that despite producing around 7 million barrels of crude oil per day, Africa only refines about 40 per cent of its 4.3 million barrels daily consumption of refined products domestically. In stark contrast, Europe and Asia refine over 95% of what they consume. 'So, while we produce plenty of crude, we still import over 120 million tonnes of refined petroleum products each year, effectively exporting jobs and importing poverty into our continent. That's a $90 billion market opportunity being captured by regions with surplus refining capacity. To put this in perspective: only about 15 per cent of African countries have a GDP greater than $90 billion. We are effectively handing over an entire continent's economic potential to others—year after year,' he said. While reaffirming his belief in the power of free markets and international cooperation, Dangote emphasised that trade must be grounded in economic efficiency and comparative advantage — not at the expense quality or safety standards. He stressed, 'It defies logic and economic sense for Africa to be exporting raw crude only to re-import refined products—products we are more than capable of producing ourselves, closer to both source and consumption.' Reflecting on the experience of delivering the world's largest single-train refinery, Dangote also highlighted a range of challenges faced, including technical, commercial, and contextual hurdles unique to the African landscape. Africa's wealthiest man described building refineries such as the Dangote Petroleum Refinery as one of the most capital-intensive and logistically complex industrial facilities ever constructed. The Dangote refinery project, he said, required clearing 2,735 hectares of land (seven times the size of per cent was swampy, requiring the pumping of 65 million cubic metres of sand to stabilise the site and raise it by 1.5 metres, over 250,000 foundation piles, and millions of metres of piping, cabling, and electrical wiring among others. 'At peak, we had over 67,000 people on-site of which 50,000 are Nigerians, coordinating around the clock across hundreds of disciplines and nationalities. Then, of course, came the COVID-19 pandemic which set us back by two years and brought new levels of complexity, disruption, and risk. But we persevered,' he noted. The refinery also required the construction of a dedicated seaport, as existing Nigerian ports could not handle the size and volume of equipment required. This included over 2,500 pieces of heavy equipment, 330 cranes, and even the establishment of the world's largest granite quarry, with a production capacity of 10 million tonnes per year. 'In short, we didn't just build a refinery—we built an entire industrial ecosystem from scratch,' he said. Despite the refinery's technical success, Dangote identified significant commercial challenges, particularly exchange rates which have gone from N156/$ at inception to N1,600/$ at completion, and challenges around crude oil sourcing. Although Nigeria is said to produce about 2 million barrels per day, the refinery has struggled to secure crude at competitive terms. 'Rather than buying crude oil directly from Nigerian producers at competitive terms, we found ourselves having to negotiate with international trading companies, who were buying Nigerian crude and reselling it to us—with hefty premiums, of course. Logistics and regulatory bottlenecks have also taken a toll. Port and regulatory charges reportedly account for 40% of total freight costs, sometimes costing two-thirds as much as chartering the vessel itself. 'Refiners in India, who purchase crude oil from regions even farther away, enjoy lower freight costs than we do right here in West Africa because they are not saddled with exorbitant port charges,' Dangote said. He added that, in terms of port charges, it is currently more expensive to load a domestic cargo of petroleum products from the Dangote Refinery, as customers pay both at the point of loading and at the point of discharge. In contrast, when they load from Lomé, which competes with them, they pay only at the point of discharge. Dangote further criticised the lack of harmonised fuel standards across African nations, which creates artificial barriers for regional trade in refined products. 'The fuel we produce for Nigeria cannot be sold in Cameroon or Ghana or Togo, even though we all drive the same vehicles. This lack of harmonisation benefits no one—except, of course, international traders, who thrive on arbitrage. For local refiners like us, it fragments the market and imposes unnecessary inefficiencies.' Dangote, stating the challenge with diesel production in Africa, noted, 'To give one example, the diesel cloud point for Nigeria is 4 degrees. Without going into the technical details, this means that the diesel should work at a temperature of 4 degrees centigrade. Achieving this comes at a cost to us and limits the types of crude we could process. But how many places in Nigeria experience temperatures of 4 degrees? Other African countries have a more reasonable range of 7 to 12 degrees. This is a low-hanging fruit which could be addressed by the regulators.' He also cited the growing influx of discounted, low-quality fuel originating from Russia—blended with Russian crude under price caps and dumped in African markets. 'And to make matters worse, we are now facing increasing dumping of cheap, often toxic, petroleum products—some of which are blended to substandard levels that would never be allowed in Europe or North America,' he said. Dangote called on African governments to follow the example of the United States, Canada, and the European Union, which have implemented protective measures for domestic refiners. Copyright © 2022 Nigerian Tribune Provided by SyndiGate Media Inc. (
Reuters
20 hours ago
- Business
- Reuters
Ampol sees weaker first-half earnings on supply woes; reports lower margins
July 23 (Reuters) - Australia's top fuel retailer Ampol Ltd ( opens new tab on Wednesday forecast weaker half-year earnings as sea-freight conditions impacted its supply chain, and reported a 1.1% drop in second-quarter refining margins at its Lytton refinery. The company expects first-half earnings before interest and taxes on a replacement cost basis to be A$400 million ($262.04 million), compared with A$502.1 million a year earlier. The second-quarter refining margin at its Lytton refinery in Queensland, one of the company's key assets, decreased to $8.71 per barrel, down from $8.81 last year. Over the year, operational disruptions such as planned maintenance and loss of production days due to Cyclone Alfred, coupled with weak refining margins in Singapore, have weighed on refining margins and the output levels of the Queensland refinery. However, Lytton's refinery margin increased from the prior quarter's $6.07 per barrel owing to improved product crack — the difference between the price of crude oil and the prices of the refined petroleum products — in the later part of the year. The Sydney-based firm reported second-quarter total sales volume of 6,304 million liters (ML), down 4.7% from a year earlier. Its Lytton refinery output for the second quarter was 1,406 ML, compared to 1,420 ML logged a year earlier. The company's non-refining segments, convenience retail and New Zealand, performed well for the quarter. Grady Wulff, a senior market analyst at Bell Direct, noted that Ampol's convenience retail operations have been a key earnings driver, with resilient performance in this segment and New Zealand helping to cushion the impact of weaker refining results in the first half. Despite the mixed operational performance, shares gained ground, in tandem with the domestic energy sub-index (.AXEJ), opens new tab, which was lifted by steadying oil prices. Ampol stock rose as much as 4% to hit its highest since February 21. The company is slated to report its half-year financial results on August 18. ($1 = 1.5265 Australian dollars)
Zawya
20 hours ago
- Business
- Zawya
Nigeria's Dangote warns cheap Russian oil products threaten African refineries
LAGOS: Nigerian billionaire Aliko Dangote has warned discounted Russian petroleum products are pouring into African markets and risk undermining the continent's emerging refining industry. Dangote, who has been ramping up Africa's largest refinery - a $20 billion facility with an initial capacity of 650,000 barrels per day on the outskirts of Lagos - has struggled to secure crude supplies locally even as he aims to expand the capacity to 700,000 bpd. "We are now increasingly facing the dumping of cheap, often toxic petroleum products, some of which are blended to substandard levels that would never be allowed in Europe or North America," Dangote said at an oil conference in Abuja. He attributed this trend to Western sanctions on Russian oil, which have prompted Moscow to offer steep discounts to alternative markets, including Africa. Russia's energy ministry did not immediately respond to a request for comment. Dangote also expressed concern about the Lomé floating oil market off the coast of Togo, which is dominated by international traders. With over 2 million barrels of stored petroleum products, Lomé has become a key hub for fuel imports and Dangote warned it could undermine Africa's refining efforts. Despite Africa producing around 7 million barrels of crude oil per day, only 40% of its consumption is refined locally. The continent still imports over 120 million metric tons of refined products annually. Dangote's refinery, which began operations last year, has started exporting petrol, with exports reaching 1 million tons since June. However, he said local producers faced stiff competition from international traders who exploited regulatory gaps and inconsistent fuel standards across African countries. To protect the domestic industry, Dangote urged African governments to adopt measures employed in the United States, Canada, and Europe, such as tariffs and emissions caps. Despite Dangote's concerns, Africa remains a small market for Russian oil products compared to major buyers like Turkey and Brazil. In June, Russian diesel and gasoil exports to African countries dropped 30% from the previous month, totalling about 0.7 million tons. Morocco, Tunisia, Togo, and Egypt were among the largest importers, according to shipping data. Additionally, some vessels loaded in May with about 230,000 tons of Russian diesel had their destinations marked as "for orders," indicating that final discharge points were not declared or not yet determined. (Reporting by Isaac Anyaogu. Editing by Mark Potter)
Reuters
a day ago
- Business
- Reuters
Ampol forecasts lower half-year earnings on supply chain impacts
July 23 (Reuters) - Australia's top fuel retailer Ampol Ltd ( opens new tab on Wednesday forecast weaker half-year earnings as sea-freight conditions impacted its supply chain, and reported a 1.1% drop in second-quarter refining margins at its Lytton refinery. The company expects first-half earnings before interest and tax on a replacement cost basis (RCOP EBIT) to be A$400 million ($262.04 million), compared with A$502.1 million a year earlier. The second-quarter refining margin at its Lytton refinery in Queensland, one of the company's key assets, decreased to $8.71 per barrel in the second quarter, down from $8.81 last year. Over the year, operational disruptions such as planned maintenance and loss of production days due to Cyclone Alfred, coupled with weak refining margins in Singapore, have weighed on refining margins and the output levels of the Queensland refinery. However, the refinery margin increased from the prior quarter's $6.07 per barrel, due to improved product crack - the difference between the price of crude oil and the prices of the refined petroleum products - in the later part of the year. The Sydney-based firm reported second-quarter total sales volume of 6,304 million liters (ML), down 4.7% from a year earlier. Its Lytton refinery output for the second quarter was 1,406 ML, compared to 1,420 ML logged a year earlier. The company is slated to report its half-year financial results on August 18. ($1 = 1.5265 Australian dollars)
Globe and Mail
5 days ago
- Business
- Globe and Mail
Delek US Holdings to Host Second Quarter 2025 Conference Call on August 6th
Delek US Holdings, Inc. (NYSE: DK) ('Delek US') today announced that the Company intends to issue a press release summarizing second quarter 2025 results before the U.S. stock market opens on Wednesday, August 6, 2025. A conference call to discuss these results is scheduled to begin at 10:00 a.m. CT (11:00 a.m. ET) on Wednesday, August 6, 2025. The live broadcast of this conference call will be available online by going to and clicking on the investor relations section of the website. The online replay will be available on the website for 90 days. About Delek US Holdings, Inc. Delek US Holdings, Inc. is a diversified downstream energy company with assets in petroleum refining, logistics, pipelines, and renewable fuels. The refining assets consist primarily of refineries operated in Tyler and Big Spring, Texas, El Dorado, Arkansas and Krotz Springs, Louisiana with a combined nameplate crude throughput capacity of 302,000 barrels per day. The logistics operations include Delek Logistics Partners, LP (NYSE: DKL). Delek Logistics Partners, LP is a growth-oriented master limited partnership focused on owning and operating midstream energy infrastructure assets. Delek US Holdings, Inc. and its subsidiaries owned approximately 63.6% (including the general partner interest) of Delek Logistics Partners, LP as of February 18, 2025. Information about Delek US Holdings, Inc. can be found on its website ( investor relations webpage ( and news webpage (
