Chairman of Dangote Industries Limited, Aliko Dangote said Nigeria can save Africa over $17 billion annually from the importation of petroleum products, calling on the country to boost its crude oil production and manage supply effectively.
By doing this, Dangote, whose 650,000 per annum capacity refinery in Lagos, has begun selling petroleum products to the public, said the country would become not a net importer of petroleum products but a net exporter of the products.
Dangote who was speaking at the Crude Oil Refinery Owners Association summit in Lagos, however, called for government support and investor incentives to develop 1.5 million barrels per day refining capacity, thus, ensuring sufficient feedstock for domestic refineries and positioning Nigeria as a key player in global oil markets.
Seeing Nigeria as a potential petroleum hub in Africa, Dangote expressed concern that, despite 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 have cost Africa approximately $17 billion in 2023.
He said that Nigeria could capitalise on this situation to become a net exporter of refined petroleum products, as the markets would be more competitively served from Nigeria.
He said; “Both the crude oil and the petroleum products will travel shorter distances. The logistics costs of floating storage will be eliminated, and countries can purchase their petroleum product requirements just-in-time.
“Nigeria and Africa can become completely self-sufficient, and we can keep all the value on our shores. We have done it in cement, and we can certainly do it for petroleum products,” he noted.
Dangote disclosed that the Dangote Refinery already produces sufficient diesel and jet fuel to meet Nigeria’s demand.
“We recently started the production of PMS and will soon ramp up to meet Nigeria’s needs. Our refined products have been exported to diverse markets, including Europe, Brazil, the UK, the USA, Singapore, and South Korea,” he added.
Dangote who was represented at the occasion by Mansur Ahmed, Group Executive Director, Dangote Industries Limited emphasised that Nigeria must develop a refining capacity of 1.5 million barrels per day and prioritise domestic crude supply obligations to seize the emerging opportunity, urging the government to incentivise investors.
He contrasted this with the Dangote Oil Refinery, which, he said, was built without any government incentives.
He said, “It is unfortunate that while countries like Norway are putting oil proceeds into a future fund, in Africa, we are spending oil proceeds from the future. We will also need to prioritise the implementation of domestic crude supply obligations. We will need to expand our crude oil production capacity to support demand from new refining capacity. “The government of President Bola Ahmed Tinubu is taking active steps to achieve this through fast-tracking IOC divestments and other initiatives.”
Dangote explained that global developments in the petroleum sector, particularly in Europe, will disrupt historical trade flows for refined petroleum products in Africa, stating that Nigeria is uniquely positioned to capitalise on the opportunity and become a significant player in the global oil industry.
He called for consultation, collaboration, and cooperation among stakeholders.
Chairman of IPPG/Waltersmith Refinery & Petrochemicals Co. Ltd, Abdulrazaq Isa, called on the government to support domestic refiners by ensuring the availability of crude, adhering to domestic crude supply obligations, and implementing effective pricing and monitoring measures to prevent smuggling.
Also the Chairman of CORAN’s Board of Trustees and CEO of Integrated Oil & Gas, Captain Emmanuel Iheanacho remarked that the Dangote Oil Refinery has set a high standard by producing Euro-V products, thus protecting citizens from exposure to high-sulphur products.
He noted that transforming Nigeria into a net exporter will bring numerous benefits but reiterated the need for increased investment to boost crude production, lamenting that Nigeria loses approximately $83 billion annually by not meeting its OPEC production quota.
Minister of State for Petroleum Resources (Oil), Senator Heineken Lopkobiri, assured that the government would continue to refine frameworks to enhance crude production and support domestic refineries.