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Nigeria's Dangote refining plant ramps up production in response to new fuel import duties

Nigeria's Dangote Petroleum Refinery is increasing production to meet the national demand for petrol and diesel, said it on Saturday. This comes after the government approved an import tariff on fuel that aims to protect domestic production. In a memo released this week, the government stated that the continent's largest oil producer, Nigeria, has been working to reduce its dependence on imported fuel. The 15% import duty is intended to protect recent multi-billion dollar investments in domestic refinery. Anthony Chiejina is a Dangote Group spokesperson. The company spent $20 billion on the construction of the 650,000 barrels per day refinery. He said that the new tariff initiative will discourage the dumping substandard fuel products. He said that the Dangote Refinery is currently increasing output. The refinery launched last year, but it has been struggling to compete with cheap imports.

Chiejina stated that "our refinery is currently loading more than 45 million litres per day of petrol, and 25 million litres per day of diesel which exceeds Nigeria’s demand."

The refinery, which began producing petrol in September 2024 has been able to reduce the price of fuel at the pump and eradicate shortages. Local fuel traders claim that the price cuts are part of an undercutting strategy.

They warned that if the measure was poorly implemented it could cripple the fuel importation, create a monopoly in refining, and make Nigeria vulnerable to fuel shortages on the long-term.

Billy Harry, the head of Nigeria's Petroleum Products Retail Outlets Owners Association, said that if importers of petroleum products are not managed properly, they will lose their business.

He added: "If local refineries do not have proper regulation, monopoly can harm the market."

(source: Reuters)