Aliko Dangote, Chairman of Dangote Refinery and Petrochemicals Company Limited, has emphasized the need for Nigeria to boost its crude oil production and effectively manage its supply chain to transition from being a net importer to a net exporter of petroleum products. Dangote made this assertion during his keynote speech at a summit organized by the Crude Oil Refinery Owners Association of Nigeria (CORAN), held recently in Lagos.
Represented by Engr. Mansur Ahmed, Group Executive Director of Dangote Industries Limited, Dangote highlighted the potential for Nigeria to become Africa’s refining hub, pointing out that while the continent produces over 3.4 million barrels of crude oil daily, it still imports nearly 3 million barrels of refined petroleum products each day. According to him, these imports, primarily sourced from Europe, Russia, and other regions, are projected to cost Africa approximately $17 billion in 2023 alone.
“Despite our significant crude oil production, Africa remains heavily reliant on imports to meet its refined petroleum needs,” Dangote remarked. “However, Nigeria is well-positioned to fill this gap and become a leading supplier of refined petroleum products, considering its strategic location and capacity to meet the demand more competitively.”
Dangote explained that establishing Nigeria as a refining hub would drastically reduce logistics costs and allow countries to purchase their petroleum products just-in-time, ultimately retaining more value within Africa. He cited the success of the Dangote Refinery, which has already begun producing sufficient diesel and jet fuel to meet Nigeria’s demands, and has commenced the production of Premium Motor Spirit (PMS), also known as petrol, with plans to ramp up output in the coming months.
“Our products are now being exported to international markets, including Europe, Brazil, the UK, the USA, Singapore, and South Korea,” he added. This, according to Dangote, is a testament to Nigeria’s potential to not only achieve self-sufficiency but also become a key player in the global downstream oil market.
Addressing the challenges ahead, Dangote called for a concerted effort to develop a refining capacity of 1.5 million barrels per day. He also stressed the need for Nigeria to prioritize domestic crude supply obligations to feed its refineries and urged the government to create an enabling environment that attracts more investments in the sector.
“It is unfortunate that while countries like Norway are saving their oil revenues for the future, we in Africa are spending proceeds from the future,” Dangote stated. “Nigeria must expand its crude oil production capacity to support the increasing demand from new refining projects, and I commend President Bola Ahmed Tinubu’s administration for taking proactive steps through initiatives such as accelerating International Oil Companies (IOC) divestments.”
Commenting on the global petroleum sector, Dangote noted that shifting trade dynamics, particularly in Europe, present a unique opportunity for Nigeria to assert itself as a prominent player in the industry. He emphasized the importance of collaboration among stakeholders to harness these opportunities and drive the country’s economic growth.
“As a strong exporter of refined products, Nigeria will see improvements in its balance of trade and generate much-needed foreign exchange. Nigeria’s potential as a refining hub is not in doubt; we just need to seize the moment and make it happen,” he urged.
Reflecting on the summit’s theme, “Making Nigeria a Net Exporter of Petroleum Products,” Dangote acknowledged that such an ambition would have seemed far-fetched only a few years ago. However, with the commencement of operations at the Dangote Petroleum Refinery, Nigeria is set to transform from a heavy importer of petroleum products to a net exporter, further solidifying its position in the global energy market.
As the largest refinery in Africa, the Dangote Refinery’s contributions are expected to significantly reduce Nigeria’s dependence on imports and establish the country as a key player in the downstream oil sector.
Sources and Credits: This article is based on the keynote speech delivered at the CORAN summit and insights provided by representatives of Dangote Industries Limited. Further details have been extracted from Dangote Refinery’s recent reports on refining capacity and export achievements.
