According to a report titled “Africa review and outlook (2022 – 2023) Turbulence on the road to recovery” by S&P Global Commodity Insights, it has been revealed that the Dangote Refinery will not operate at full capacity until the year 2024. Because of this, it won’t have enough diesel to provide the local demands in significant quantities. Despite the fact that the refinery will open in Q4 2023, the report cautions that Nigeria may not be capable of satisfying its diesel supply demands in the near term. The report indicates that Sub-Saharan Africa (SSA) relies heavily on imports because of its inadequate refining capabilities.
Nearly 80% of the diesel used in Sub-Saharan Africa is imported, and this amounts to nearly 700,000 barrels per day. When fully operational, the Dangote refinery in Nigeria is anticipated to generate large additional volumes, which, in turn, will reduce the amount of pressure created by supply restrictions throughout the area. Yet, the vast greenfield refinery has a long way to go before it is completed. By the fourth quarter of 2023, it will begin operating, although it won’t be at full capacity until the end of 2024.
Diesel cost per litre surged in January 2023 due to scarcity.
In recent years, there has been a dramatic increase in the cost of diesel in Nigeria. This can be attributed to the nation’s inability to maintain its own refining capacity, which has forced the nation to rely on constant imports of the product. The average price of diesel per litre in Bauchi state, Nigeria, increased to N900 in January 2023, per figures released by the National Bureau of Statistics (NBS). Meanwhile, diesel prices across the country increased by 187.69% in just a year. In January 2022, a litre of diesel cost N288.09, while in January 2023, the average price was N828.82.
Based on the report’s expectation of a disruption in supply caused by Russia, S&P Global is concerned that diesel prices may rise even further if Nigeria cannot restart its domestic refining capacity. Diesel-powered generators have become widespread in Nigeria due to the country’s poor electricity infrastructure. Yet, as prices continue to rise due to the lack of any refining capacity in the country, companies have begun making the switch to solar power. An alternative clean power supply that protects the environment is made available to commercial and industrial (C&I) firms by switching to solar, says the experts in the country.
There is a significant shift to solar power by companies.
Furthermore, Evtec Energy and the financial technology firm MICT entered into a partnership agreement in February 2022 to construct a solar photovoltaic (PV) facility with a capacity of 110 MW for Tingo Foods in Delta state, Nigeria. Tingo Foods’ food processing factory will be powered by the project, which is anticipated to cost $150 million. Financial institutions Credit Suisse, JPMorgan, and Roth will join Evtec Energy in funding the project. This is only one instance of a commercial and industrial establishment that has replaced diesel generators with solar photovoltaic panels.
A 2023 report by the Energy Commission of Nigeria and the International Renewable Energy Agency (IRENA) titled “Renewable Energy Roadmap for Nigeria” developed solar photovoltaics (PV) would then have a major impact in Nigeria as power demand keeps rising across all sectors of the economy and solar PV capacity is anticipated to surpass 5 gigawatts (GW) by 2030, and the off-grid solar systems would provide 13 GW by the decade’s end. According to IRENA, Nigeria’s average yearly global horizontal irradiation ranges between 1,600 and 2,200 kWh/m2. This contributes to the country’s strong solar resource potential. In contrast, the greatest values are found in the northern region of the nation.
Sub-Saharan Africa’s overall product demand is diesel.
Moreover, the worldwide market is predicted to be tight in 2023, with interruptions anticipated because of the predicted embargo on Russian shipments. According to the findings of the report, the shortfall in diesel supply had significantly widened since 2020, when a trend of refinery shutdowns surged over the SSA region and drastically reduced domestic supply. Nonetheless, diesel will continue to dominate Sub-Saharan Africa’s overall product demand in 2023, with consumption predicted to increase by 45,000 barrels per day, or 4.5%, over 2022 levels.
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Dangote Refinery won’t hit capacity till 2024 – Nigeria may not be capable of satisfying its diesel demands due to low capacity. – Express your point of view.
It very very shameful and sad that a country blessed with natural resource like petroleum will be suffering from lack of the product and this is so because of the high corruption level in every aspect of the economy.
The analysis issues a warning that Nigeria would not be able to meet its immediate demand for diesel supply.
when a pattern of refinery shutdowns spread over the SSA region, which resulted in a significant reduction in domestic supply.
Nigeria may not be capable of satisfying its diesel demands due to low capacity. The Country Nigeria is lack behind. This problem of diesel is a serious issue in Nigeria. Government need to measure up and also allow others companies to have access on building refineries
It is encouraging that the analysis suggests that weak refining capabilities in Sub-Saharan Africa are the primary reason of the region’s heavy dependence on imports.
As a result of Nigeria’s inadequate electrical infrastructure, the use of generators fueled by diesel fuel has grown extremely common there.
Due to low capacity Nigeria may not be capable of satisfying its diesel demand we need to progress this resources is in our country we need to make use of it well so we won’t be suffering from what we have
The government needs to be aware that it will not have sufficient diesel to meet the substantial demands placed on it by the local community.
Whoa, so this is just one example of a commercial and industrial facility that has substituted solar photovoltaic panels for diesel generators, Crazy.
By making the move to solar energy, businesses and factories are able to take advantage of an alternative source of clean power that is better for the environment.
The Dangote refinery in Nigeria is expected to produce significant amounts of additional fuel once it is fully operating, which will lessen the strain caused by supply limits in the region.
Due to a lack of investment in domestic refining infrastructure, the country must import this product on a near-constant basis.
The administration should be aware that it would not have enough diesel to meet the heavy needs of the people living there.
Nigeria’s poor diesel production capacity may prevent it from meeting the country’s needs. Nigeria is a backward country. Fuel shortages are a major problem in Nigeria. The government must step up and open the door for private enterprises to construct refineries.
The obstacle preventing the maintain our own refining capacity, is increase in the cost of diesel. The power sector need to be support to bring balance to the maintenance of our refineries and for them to be competent/ up to task.
Nigeria may not be able to meet its demand for diesel due to insufficient capacity, therefore we must make progress with the resources we do have and manage them wisely to prevent suffering from what we lack.
We cannot be waiting for dangote refinery. We need to get our refineries working again in Nigeria. We should invest in them and make them work.
We need to promote this resource is in our country and we need to use it well so that we won’t have to struggle because of what we have. The fact that Nigeria may not be able to meet its diesel demand due to low capacity is a really concerning one.
What is happening to all our refineries? most we wait for Dangote to start operation before we can have diesel in the country. This is very sad.
Over how many years of oil and gas discovery in Nigeria but still we import our refined crude oil product from outside the country. We don’t have a functioning refineries of our own and we are referred to as the giant of Africa. Different administration have come and are gone promising the rehabilitation of our dilapidated refineries but were never fulfilled. Now the country want to depend on private Dangote refinery, what is wrong with our refineries?
Over how many years of oil and gas discovery in Nigeria but still we import our refined crude oil product from outside the country. We don’t have a functioning refineries of our own and we are referred to as the giant of Africa. Different administration have come and are gone promising the rehabilitation of our dilapidated refineries but were never fulfilled. Now the country want to depend on private Dangote refinery, what is wrong with our refineries? If the possibility of having diesel production this year is slim.