European traders and fuel importers are currently steering clear of diesel from the Dangote refinery in Nigeria, Africa’s biggest and newest, because the current fuel samples contain sulfur and other components exceeding the European winter fuel specifications, traders and market sources tell Argus.
Despite the tight fuel market in the European region, buyers are avoiding diesel from the Dangote refinery because of elevated sulfur and cetane numbers.
The current lack of exports from Nigeria to Europe is due to diesel not meeting European standards for winter fuels and not suitable for blending to produce other fuels, the sources told Argus.
The issue is not arbitrage economics, it is off-specification content in the fuels, a Nigerian source familiar with the matter told Argus.
The Dangote refinery “can’t supply winter diesel, at present, to the colder regions [of Europe],” the source said.
A European distillates trader also commented on a sample from mid-November, telling Argus that the diesel from Dangote has compounds far exceeding the German winter specifications, for example.
The lack of European imports of diesel from Nigeria could tighten the regional market further.
Africa’s newest and biggest refinery, the 650,000-barrels-per-day Dangote plant, also faces operational setbacks, unplanned outages, a strike, and suspected sabotages by workers amid restructuring.
Refining margins in North America and Asia are now at their highest since late 2023 and early 2024, while European margins are even higher as the market braces for a significant disruption early next year when the EU will ban, effective January 21, imports of products made from Russian crude oil, per the July sanctions package against Russia.
In this package, the EU finally moved to close the Russian oil loophole, which currently allows EU imports of fuels processed from Russian oil, including in India, a key buyer of Russian crude until now.
By Michael Kern for Oilprice.com
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