Dangote Refinery: Nigeria On Path To Becoming Petroleum Export Hub-Aliko

Nigeria must bolster its crude oil production and efficiently manage supply to ensure sufficient feedstock for its domestic refineries, as the country seeks to transition from a net importer to a net exporter of petroleum products. Aliko Dangote, Chairman of Dangote Refinery and Petrochemicals, made this call during a summit organized by the Crude Oil Refinery Owners Association of Nigeria (CORAN) in Lagos.

The event gathered government officials and key players from the midstream and downstream oil sectors.

Dangote highlighted Nigeria’s immense potential to become a refining powerhouse, yet expressed concern over Africa’s reliance on petroleum imports, despite the continent producing over 3.4 million barrels of crude oil daily. Africa imports nearly 3 million barrels of refined products daily, costing the continent an estimated $17 billion in 2023 alone.

“Both the crude oil and petroleum products will travel shorter distances. The logistics costs of floating storage will be eliminated, and countries can purchase their petroleum products just-in-time. Nigeria and Africa can become completely self-sufficient, and we can keep all the value on our shores,” Dangote stated, pointing to Nigeria’s cement industry as a model for replicating success.

He stressed that the Dangote Refinery, already meeting local diesel and jet fuel demand, recently began producing Premium Motor Spirit (PMS) and is on track to satisfy Nigeria’s full requirements. Moreover, Dangote noted that their refined products are being exported to markets in Europe, Brazil, the UK, the USA, Singapore, and South Korea.

Represented by Engr. Mansur Ahmed, Group Executive Director of Dangote Industries Ltd., Dangote urged the government to incentivize the local refining industry, explaining that the Refinery was built without any governmental incentives. He called for increased refining capacity to reach 1.5 million barrels per day and for prioritizing domestic crude supply obligations.

“…In Africa, we are spending oil proceeds from the future,” Dangote remarked, in contrast to countries like Norway, which are saving their oil proceeds for the future. He emphasized the need to expand crude oil production to meet the demands of upcoming refining capacity, acknowledging the government’s steps under President Bola Tinubu to accelerate international oil companies’ divestments and other initiatives.

The summit’s theme, “Making Nigeria a Net Exporter of Petroleum Products,” he said, is becoming more realistic as Nigeria is poised to shift from reliance on imports. He emphasized the global shift in petroleum trade flows, which presents an opportunity for Nigeria to become a significant player in the industry, improving its trade balance and generating foreign currency.

Supporting this vision, Abdulrazaq Isa, Chairman of IPPG/Waltersmith Refinery & Petrochemicals, called on the government to ensure consistent crude supply and to implement proper pricing mechanisms to prevent smuggling. CORAN’s Board of Trustees Chairman, Captain Emmanuel Iheanacho (rtd), praised Dangote’s efforts in producing Euro-V standard products, protecting the Nigerian market from harmful high-sulfur imports.

The summit also featured panel discussions addressing policy strategies for Nigeria’s downstream petroleum refining sector, focusing on how to achieve self-sufficiency in petroleum products and boost domestic production.

For more news on Nigeria’s petroleum sector, visit fasnewsng.com.

By Lekan Olofinsusi