Aliko Dangote, Chairman of the Dangote Refinery and Petrochemical Company Limited, has emphasized the need for Nigeria to enhance its crude oil production capacity and manage its crude supply effectively. This strategic move is essential for transitioning from a net importer to a net exporter of petroleum products.
Dangote made this assertion during his keynote address at a summit held in Lagos by the Crude Oil Refinery Owners Association of Nigeria (CORAN), which attracted top government officials and key stakeholders from the midstream and downstream sectors.
Addressing Nigeria’s potential as a refining hub, Dangote raised concerns that, despite the country 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, were estimated to cost approximately $17 billion in 2023.
He argued that Nigeria has the opportunity to become a net exporter of refined petroleum products, as the local market can be served more competitively. He stated, “Both the crude oil and the petroleum products will travel shorter distances. The logistics costs of floating storage will be eliminated, allowing countries to purchase their petroleum product requirements just-in-time.”
Dangote believes that Nigeria and Africa can achieve complete self-sufficiency, retaining all value within their borders. He referenced the successful production of cement in Nigeria as a model that can be replicated for petroleum products.
“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 (Premium Motor Spirit) and will soon ramp up to meet Nigeria’s needs,” he added.
Moreover, he highlighted that the refined products from the Dangote Refinery have been exported to various markets, including Europe, Brazil, the UK, the USA, Singapore, and South Korea.
Represented by Engr. Mansur Ahmed, Group Executive Director of Dangote Industries Ltd, Dangote emphasized the necessity for Nigeria to develop a refining capacity of 1.5 million barrels per day and prioritize domestic crude supply obligations to capitalize on this opportunity.
Acknowledging both present and future challenges, he urged the government to incentivize investors, contrasting this with the Dangote Oil Refinery, which was built without any government incentives.
“It is unfortunate that while countries like Norway are investing oil proceeds into a future fund, in Africa, we are spending oil proceeds from the future. We must prioritize the implementation of domestic crude supply obligations,” he concluded.