Dangote Refinery Approved as Exclusive Jet Fuel Supplier for Nigerian Airlines

The Federal Government of Nigeria has granted approval for Dangote Refinery to become the exclusive supplier of jet fuel for the nation’s airline operators. This announcement was made by the country’s Minister of Aviation and Aerospace Development, Festus Keyamo, in a televised interview on Channels TV, broadcast on Tuesday.

During the interview, Minister Keyamo disclosed that the decision had the aviation industry’s nod and was backed by his ministry. The airline operators are set to obtain their jet fuel exclusively from the Dangote Refinery, which has a capacity of 650,000 barrels per day, now designated as the sole provider for the aviation sector.

Keyamo explained that the timing of this approval is advantageous as it follows the Federal Government’s recent implementation of a naira-for-crude agreement with Dangote. This currency agreement means transactions will be conducted in the local currency, without any dollar component, reducing forex demand pressure.

Keyamo highlighted that purchasing jet fuel from Dangote Refinery would protect airline operators from the volatility of international crude oil prices, therefore lowering their operational costs. “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 stated.

The Dangote Refinery commenced operations in April, initially producing jet fuel and diesel, the latter of which reached the local market the subsequent month. After successfully launching its domestic supply, the refinery also began exporting its aviation fuel.

The first shipment of jet fuel, part of a 120,000 metric ton tender allocated to British Petroleum (BP), was sent abroad from the Lekki Free Zone in Lagos. On May 27, the vessel Doric Breeze departed for Rotterdam, Netherlands, carrying 45,000 metric tons of jet fuel, a transfer reported by S&P Global Commodities at Sea. Spanish refiner Cepsa participated in the same tender and is soon expected to deliver to Europe.

In addition to Europe, Dangote has exported six cargoes of jet fuel and kerosene, with destinations including Senegal, Togo, and Ghana.