A few days ago, Aliko Dangote announced that the capacity of his new refinery will be able to cater to 100 percent of Nigeria’s fuel needs. This is an important need for the country as it would enable crude to be processed locally and distributed within record time. Also, the importation of fuel and the subsidization given by the government are automatically removed. With full government support, fuel will be made available to citizens at fair rates based on the market forces.
Historically, Nigeria has always battled with the issue of crude oil. Nigeria has not met her OPEC’s quota in a number of years. More so, the activities of oil thieves and saboteurs have affected the country’s finances and affected the indigenous people in various communities in the oil-rich Niger Delta. One of these effects is the oil spills, which the foreign oil companies have attributed to oil theft and pipeline vandalism. Because of this, farmlands and rivers are rendered useless as the residents can neither farm nor fish.
The new refinery is launched with a hope of boosting economy.
In a facts sheet that was released to the press, it was revealed that Dangote Refinery can meet all of Nigeria’s fuel need, which includes 53 million liters of gas per day, 34 million liters of diesel per day, 10 million liters of kerosene per day, and two million liters of jet fuel per day. It was claimed that there will still be excess for export, thereby earning the country foreign exchange and boosting the country’s reserves.
President Muhammadu Buhari opened Africa’s biggest oil refinery in Lagos in hope that it would help the energy-rich country become self-sufficient and a net exporter of refined petroleum products. The facility, which is located in Nigeria’s economic hub Lagos is worth $19 billion. It has a capacity of 650,000 barrels per day. To put this in context, one oil barrel is approximately 159 liters. This means that the factory can process 103,350,000 liters of crude oil per day. This is more than the country’s 99 million liters fuel need per day.
This venture can be game-changer as thousands of jobs will be created.
Some analysts have called it a “game-changer” for Nigeria’s oil and natural gas sector, which has been struggling for many years, while others say its capacity could be limited by oil thefts. The plant will start operations before the end of July, according to Aliko Dangote. This is alongside a fertilizer plant, both of which will be powered by a 435-megawatt power station. At full capacity, at least 40% of the oil products made there would be available for export, resulting in significant foreign exchange earnings for Nigeria.
In addition, the refinery will create tens of thousands of jobs in Nigeria. Authorities believe it could boost fuel supplies across Africa at a time when some of its refineries are operating far below capacity. At the opening ceremony, Muhammadu said the project shows the importance of partnering with the private sector to accelerate economic growth across the continent. Some analysts also believe that the capacity of the refinery could be limited due to massive oil theft in the Niger Delta, which has caused oil output to reduce to a record low in more than a decade.
Expert says the plant is not a magic bullet for energy sector problems.
With the buzz that has been created around the opening of the refinery, it is easy for the general public to believe that this will solve Nigeria’s problems in the industry. Olufola Wusu, an oil and gas expert (who was a member of the team that reviewed Nigeria’s gas policy), was also at the event. “The Dangote refinery is not a silver bullet for all the problems in the energy sector in Nigeria,” he said.