DMEA: Dangote Refinery becomes sole supplier of Jet A1 to Nigerian airlines

Nigeria’s federal government has approved the 650,000 barrel per day (bpd) Dangote Refinery as the sole supplier of Jet A1 to Nigerian airline operators, according to an announcement made by the country’s Minister of Aviation Festus Keyamo.

Keyamo’s announcement came during an interview with Channels TV on October 8, where he added that airline operators had “agreed to allow the 650,000 bpd refinery to be the exclusive provider of jet fuel,” with his “approval and support” – according to Nairametrics

The official noted that the timing for the deal was perfect due to the fact that the Nigerian government had recently introduced a naira-for-crude agreement with Dangote, and that this agreement with airlines would help ease pressure on the foreign exchange.

He explained: “The airline operators just met recently. With my blessing, it’s a decision from the airline operators in Nigeria that they should only buy from Dangote refinery Jet A1. You can see that yesterday we started naira-for-crude purchase with Dangote. It’s all Naira, no Dollar component”.

Keyamo continued to say that purchasing fuel refined at Dangote would protect airlines from the impacts of crude oil price fluctuations – which would end up reducing operational costs in general.

“The price will no longer be subjected to the varying factors of the international market, nor the headwinds of oil price in the international market. It will be in local currency so we can be clear as to the cost of it. We will buy in naira. I’m sure we are going to have access to cheaper Jet A1 fuel,” he said.

Dangote initially began producing Jet A1 in April, and in a few months had begun exporting it to Europe in June as it continued to increase its production capacity.

At the time, S&P Global Insights cited four market sources who noted that the refinery’s first jet fuel cargo was scheduled for delivery in Rotterdam, under transport by BP. The company had been partially awarded a 120,000 metric tonne tender for the end of May, according to the sources.

S&P Global Commodities at Sea data showed that the ship transporting the fuel – named the Doric Breeze – loaded the 45,000 metric tonne cargo from Lekki on May 27.

Additional companies involved in the tender included Spanish refiner Cepsa, who was expected to deliver supplies of Dangote fuel to Europe soon according to traders with knowledge on the matter.

Neither of the companies offered comments on their jet fuel purchases from the plant, however, a Dangote spokesperson previously confirmed that the refinery was in line with European jet A1 standards when shipments of the product within Africa first began in April.

So far, Dangote has been able to export six cargoes of Jet A1/kerosene – delivering it to Togo, Senegal, or Ghana.

If you’d like to read more about the key events shaping Africa and the Middle East’s downstream sectors, please click here for NewsBase’s Downstream Middle East & Africa Monitor.