Aradel Holdings Plc says it plans to commence petrol production at its modular refinery in 2027, following the removal of fuel subsidies and the deregulation of Nigeria’s downstream petroleum sector.
Gatekeepers News reports that the company said the changes in the market have improved the commercial prospects of producing Premium Motor Spirit (PMS), commonly known as petrol.
A modular refinery is a compact, skid-mounted oil processing facility designed for relatively quick deployment and efficient crude oil refining.
In an interview published by Bloomberg on Thursday, Temitayo Ogunbanjo, who manages Aradel’s refinery business, said the deregulation of the downstream market “has now created a path” for the company to manufacture petrol.
The refinery currently produces kerosene, diesel, gas oil and naphtha.
Aradel’s planned expansion comes amid growing calls for increased refining capacity across Africa, with the Federal Government maintaining that existing facilities are insufficient to meet regional demand.
Speaking on Wednesday, Heineken Lokpobiri, Minister of State for Petroleum Resources (Oil), said Africa needed more refineries, arguing that the Dangote Petroleum Refinery alone could not satisfy the continent’s requirements.
“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.
“It’s the final capacity to open for middle buyers to be able to sell this entire African continent on top of the entire world.”
The planned petrol production by Aradel would add to the growing number of domestic refining facilities processing crude oil and supplying petroleum products to the Nigerian market.
On July 20, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said modular refineries, including Walter Smith, Edo Refinery and Aradel Refinery, remained operational and collectively produced about 478,000 litres of diesel per day.
The regulator said about 562,000 litres of diesel was supplied to the domestic market during the period.
Meanwhile, data from the NMDPRA showed that the Dangote refinery produced an average of 39.1 million litres of petrol per day during the month.
Aradel’s planned entry into petrol production in 2027 is expected to further increase Nigeria’s domestic refining capacity and potentially reduce the country’s reliance on imported petroleum products.
