The Dangote oil refinery is on the brink of revolutionizing Nigeria’s petrol importation, as it aims to halt the country’s monthly importation of around 1 billion liters of premium motor spirit (PMS). Aliko Dangote, Chairman of the Dangote Group, announced that Nigeria would cease importing petrol once the refinery begins selling the product in June.
A significant reduction in petrol imports was reported by the National Bureau of Statistics (NBS) following President Bola Tinubu’s removal of fuel subsidies in June. The NBS data showed a drop in monthly fuel imports from 2.09 billion liters in January 2023 to 1.64 billion liters in June and further down to 1.45 billion liters in July.
Speaking at the Africa CEO Forum Annual Summit in Kigali, Rwanda, Dangote expressed optimism about the refinery’s capacity to meet not only Nigeria’s needs but also those of West Africa and beyond. He highlighted that the refinery would start producing gasoline by June and is already producing jet fuel and diesel. He emphasized that the refinery’s output could satisfy the demand for these fuels across the continent and even allow for exports to countries like Brazil and Mexico.
The Dangote refinery, with a capacity of 650,000 barrels per day, is the largest in Africa and Europe. It has already commenced the sale of diesel and aviation fuel but has yet to introduce its petrol to the market. To secure a steady supply of crude, the refinery has made deals with companies like TotalEnergies and is seeking additional supplies from the United States.
Industry Reactions
The announcement has been met with enthusiasm from industry stakeholders. Hammed Fashola, National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), expressed confidence in the refinery’s ability to meet Nigeria’s fuel demands and even support neighboring countries. Fashola indicated that marketers are eager to start lifting fuel from the refinery, although he acknowledged that prices might not revert to pre-subsidy levels but could see a marginal reduction.
Similarly, the Major Energies Marketers Association of Nigeria (MEMAN) has registered with the Dangote refinery, preparing to buy and distribute its products. MEMAN Executive Secretary Clement Isong noted that members are waiting for the refinery to start full production to commence commercial transactions.
Government and Economic Implications
The Nigerian National Petroleum Company Limited (NNPC) has been the sole importer of PMS, often capping prices below costs. The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, recently emphasized the need for Nigeria to end fuel importation to conserve foreign exchange and boost other economic sectors.
Nigerians have responded with mixed feelings, with some welcoming the change and others skeptical after prolonged delays. However, the consensus is that the Dangote refinery holds significant promise for reducing fuel import dependency and stabilizing the local market.
In conclusion, the Dangote refinery’s impending petrol production is poised to end Nigeria’s reliance on imported fuel, promising a transformative impact on the country’s energy sector and economy. This development is expected to bring substantial benefits, including cost reductions, increased supply stability, and economic diversification.