By Modupe Gbadeyanka
The Chairman of Dangote Refinery and Petrochemicals Company Limited, Mr Aliko Dangote, has tasked the Nigerian government to prioritise domestic crude supply to enable local refiners to take advantage of supply gaps in the African market.
The businessman said Nigeria must transit from a net importer of the commodity to a net exporter of petroleum products, saying despite producing over 3.4 million barrels of crude oil per day, Africa imports around 3 million barrels of petroleum products daily.
He noted that these imports, primarily from Europe, Russia, and other regions, are estimated to cost approximately $17 billion in 2023.
“Both the crude oil and the petroleum products will travel shorter distances. The logistics costs of floating storage will be eliminated, and countries can purchase their petroleum product requirements just in time.
“Nigeria and Africa can become completely self-sufficient, and we can keep all the value on our shores. We have done it in cement, and we can certainly do it for petroleum products,” Mr Dangote said at a summit held in Lagos by the Crude Oil Refinery Owners Association of Nigeria (CORAN).
“It is worth noting that the Dangote Refinery already produces sufficient diesel and jet fuel to meet Nigeria’s demand. We recently started the production of PMS and will soon ramp up to meet Nigeria’s needs.
“Our refined products have been exported to diverse markets, including Europe, Brazil, the UK, the USA, Singapore, and South Korea,” the business mogul, represented by the Group Executive Director of Dangote Industries Ltd, Mr Mansur Ahmed, said.
Mr Dangote emphasised that Nigeria must develop a refining capacity of 1.5 million barrels per day and prioritise domestic crude supply obligations to seize this opportunity.
“It is unfortunate that while countries like Norway are putting oil proceeds into a future fund, in Africa, we are spending oil proceeds from the future. We will also need to prioritise the implementation of domestic crude supply obligations.
“We will need to expand our crude oil production capacity to support demand from new refining capacity. The government of President Bola Tinubu is taking active steps to achieve this through fast-tracking IOC divestments and other initiatives,” he stated.
The Chairman of CORAN’s Board of Trustees and chief executive of Integrated Oil and Gas, Mr Emmanuel Iheanacho, remarked that the Dangote Oil Refinery has set a high standard by producing Euro-V products, thus protecting citizens from exposure to high-sulphur products.
He noted that transforming Nigeria into a net exporter will bring numerous benefits but reiterated the need for increased investment to boost crude production, lamenting that Nigeria loses approximately $83 billion annually by not meeting its OPEC quota.
He urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to consider cancelling import licences, as Nigeria can now meet its local demand.
Chairman of Major Energies Marketers Association of Nigeria (MEMAN), Huub Stokman, stated that Nigeria is on the verge of becoming Africa’s refining powerhouse, which will significantly boost the economy.
The Chairman of CORAN, Momoh Oyarekhua, also expressed concern over challenges related to crude supply and stated that domestic refiners will work with regulators and stakeholders to address these issues.
On his part, the Minister of State for Petroleum Resources (Oil), Mr Heineken Lopkobiri, assured that the government would continue to refine frameworks to enhance crude production and support domestic refineries.
His counterpart from the Ministry of Industry, Trade, and Investment, Ms Doris Uzoka-Anite, emphasised the Tinubu-led administration’s commitment to ensuring value addition for mineral resources before export.