Dangote and Local Refineries Aim to End Fuel Importation in Nigeria

Dangote and Local Refineries Aim to End Fuel Importation in Nigeria

Dangote and Local Refineries Aim to End Fuel Importation in Nigeria – Nigeria is on the brink of a significant transformation in its petroleum industry. Local refinery owners, including the Dangote Petroleum Refinery, have pledged to eliminate the need for imported refined petroleum products within 18 months. However, they emphasize that this ambitious goal is contingent upon the Federal Government’s cooperation.

A United Front for Self-Sufficiency

The Crude Oil Refiners Association of Nigeria (CORAN) represents the collective voice of local refinery owners. In a recent interview with The PUNCH, CORAN Publicity Secretary Eche Idoko revealed that several refineries are nearing completion. These refineries, alongside the 650,000-barrel-capacity Dangote Petroleum Refinery, have the potential to meet Nigeria’s fuel demands comprehensively.

Idoko’s statement comes amid concerns about Nigeria‘s dependency on fuel imports. The Chief Executive of the Nigerian Midstream and Downstream Regulatory Authority, Farouk Ahmed, has stated that the country cannot halt fuel imports abruptly. This stance is aimed at preventing a monopoly by the Dangote refinery and ensuring energy security.

Addressing Inflation Through Local Refining

Idoko argued that tackling Nigeria’s rising inflation is impossible without addressing fuel prices. He stressed the importance of involving local refiners in the government’s plans. “You can’t tackle inflation if you don’t address the pump price of petroleum products,” Idoko asserted. “In 18 months, if the Nigerian government works with our programmes, we can stop the importation of petroleum products completely.”

Nigeria has ample crude oil to supply its refineries. However, crude oil theft has severely impacted the upstream sector. Idoko pointed out that local refineries could help mitigate this issue. “People steal crude through the pipelines, but local refineries can source crude directly from nearby fields, reducing theft and losses,” he explained.

Furthermore, Idoko suggested that international oil companies (IOCs) should sell crude oil to local refineries at a lower price than the international rate. He also advocated for crude oil transactions in naira rather than dollars to reduce production costs and alleviate pressure on the local currency.

Challenges and Opportunities Ahead

The push for local refining faces several challenges. Farouk Ahmed has warned against relying solely on the Dangote refinery for fuel supply, citing energy security concerns. According to Ahmed, Dangote requested the suspension of import licenses for other marketers, which could create a monopoly. He argued that such a move would be detrimental to the nation and the market.

In response, Aliko Dangote, President of Dangote Group, denied any monopolistic intentions. He pointed out that the Nigerian National Petroleum Company Limited (NNPC) is investing $4 billion in renovating government-owned refineries, which contradicts claims of a monopoly.

Despite these challenges, many Nigerians support the move to end fuel importation. They believe that this shift will lower the pump prices of petrol and diesel, providing much-needed relief to consumers. Dangote has announced plans to begin petrol supply between August 10 and 12, although an anonymous Dangote Group official hinted at the possibility of exporting petrol if the crude supply crisis continues.

Conclusion

In summary, Nigeria stands at a critical juncture in its quest for energy self-sufficiency. The collaboration between the government and local refiners is crucial to ending fuel importation and addressing inflation. While challenges remain, the potential benefits for the economy and consumers are immense. With concerted efforts, Nigeria can achieve a more stable and self-reliant petroleum industry within the next 18 months.