Nigeria’s refining capacity is set for another boost as Aradel Holdings Plc plans to commence petrol production at its modular refinery in 2027.
The company’s move comes after the removal of fuel subsidies and the deregulation of the downstream petroleum market, changes that have improved the commercial prospects of producing petrol locally.
Temitayo Ogunbanjo, who manages Aradel’s refinery arm, disclosed the plan in an interview published by Bloomberg on Thursday. He said deregulation “has now created a path” for the company to manufacture petrol.
Aradel already produces kerosene, diesel, gas oil and naphtha at the facility and adding petrol would expand its product range and increase the contribution of the modular refinery to Nigeria’s domestic fuel supply.
The planned expansion comes against the backdrop of an increase in refining activity across Nigeria. Data released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on July 20 showed that modular facilities, including Walter Smith, Edo refinery and Aradel refinery, remained operational.
The facilities produced about 478,000 litres of diesel per day, with 562,000 litres supplied to the domestic market, according to the regulator.
Nigeria’s refining landscape is also being reshaped by the scale of the Dangote Petroleum Refinery. NMDPRA reported that Dangote produced an average of 39.1 million litres of petrol per day during the month covered by its data.
Despite that output, Heineken Lokpobiri, minister of state for petroleum resources (oil), said during the week that Africa still requires more refineries. He argued that the Dangote refinery would not be sufficient to meet the continent’s demand, even as its refining capacity is increased to 1.4 million barrels.
“The Dangote Refinery is not enough. Despite the fact that the refinery is increasing its refining capacity to 1.4 million barrels; but it is not enough for the African continent,” Lokpobiri said.
He also said the expanded Dangote facility would create opportunities for middle buyers to distribute petroleum products across Africa and the wider global market.
Aradel’s planned entry into petrol production adds another dimension to this changing landscape. Its refinery is moving from its current portfolio of kerosene, diesel, gas oil and naphtha towards producing one of the country’s most widely consumed petroleum products.
If the 2027 target is achieved, Aradel will become another domestic source of petrol, strengthening Nigeria’s growing refining base and adding to the country’s capacity to process crude oil into finished petroleum products at home.
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