From Adanna Nnamani, Abuja
The Organisation of the Petroleum Exporting Countries (OPEC) has warned that the increased petrol production at the Dangote refinery is likely to put additional pressure on the already struggling European market.
In its monthly report published on Wednesday, OPEC said that the enhanced petrol output from Dangote refinery could worsen oversupply concerns in Europe, a region currently grappling with subdued demand for petrol.
The report noted that Dangote’s recent export of its first petrol batches to international markets is contributing to the growing surplus of petrol in Europe.
OPEC pointed to the Amsterdam-Rotterdam-Antwerp (ARA) trading hub, which has seen a rise in petrol inventories. Coupled with seasonal demand pressures, this has intensified the surplus of petrol in the region.
With Dangote refinery now producing petrol for both domestic consumption and international export, OPEC forecasts that Nigeria’s increased production will lead to a release of additional petrol volumes into global markets, prompting shifts in trade flows and market destinations.
“The ongoing recovery in gasoline refinery output levels will likely exacerbate the already bearish market sentiment,” OPEC said.
“Moreover, the ongoing operational ramp-up efforts at Nigeria’s new Dangote refinery and its first gasoline exports to the international market 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 which will call for new destinations and flow adjustments for the extra volumes going forward,” it cautioned.