Olushola Bello
The Chairman of the Dangote Group, Aliko Dangote, has revealed that with the plan the Dangote Refinery has in place, Nigeria will not need to import premium motor spirit (PMS) or petrol by next month.
According to him, the refinery, which has already started supplying diesel and aviation fuel in Nigeria, can meet the diesel and petrol needs of West Africa and the aviation fuel demand of the entire African continent.
Dangote who spoke as a panelist at the Africa CEO Forum Annual Summit in Kigali on Friday said: “Right now, Nigeria has no cause to import anything apart from gasoline and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import anything like gasoline; not one drop of a litre,” he declared.
He also gave an insight into how focused the company has been since its inception in ensuring that the continent will depend less on importation soon.
“We have enough gasoline to give to at least West Africa, diesel to give to West Africa and Central Africa. We have enough aviation fuel to give to the entire continent and also export some to Brazil and Mexico,” he said.
“Today, our polypropylene and our polyethylene will meet the entire demand of Africa and we are doing base oil, which is like engine oil, we are doing linear benzyl, which is raw material to produce detergent. We have 1.4 billion people in the population, nobody is producing that in Africa.
“So, all the raw materials for our detergents are imported. We are producing that raw material to make Africa self-sufficient.
“As I said, give us three or a maximum of four years and Africa will not, I repeat, not import any more fertilizer from anywhere. We will make Africa self-sufficient in potash, phosphate, and urea, we are at three million tonnes and in the next twenty months, we will be at six million tonnes of urea which is the entire capacity of Egypt. We are getting there.”
Dangote recalled how his dream for further investment in Africa as well as ending fuel importation in Africa has culminated in what is now one of the biggest refineries in the world.
“For some of us, despite the boom of the capital market of the US, you know, Google, Microsoft and the rest, we didn’t participate, we took all our money and invested in Africa.
“We had this dream, just about five years ago and we said we want to move from five billion (dollars) revenue to thirty billion revenue and we made it happen. It is possible and now we have made it happen and now we have finished our refinery.
“Our refinery is quite big, it is something that we believe that Africa needs. If you look at the whole continent, there are only two countries that don’t import petroleum products, which is a tragedy. They are only Algeria and Libya. The rest are all importers. So, we need to change and make sure that we don’t just go and produce raw materials, we should also produce finished products and create jobs.
Speaking further, the African richest man said, “One of the things we also need to know as Africans is that we produce raw materials and export them when you export raw materials and somebody now keeps importing things into your continent and dumping goods. what you are importing is poverty and exporting jobs. So, we have to change that narrative.”
“We just commissioned in February and now we are producing jet fuel, we are producing diesel and by next month, we will be producing gasoline. What that would do is that we would be taking most of the African crude that is being produced and also be able to supply not only Nigeria, because our capacity is too big for Nigeria, but it would also supply West Africa, Central Africa and also South Africa.
“We have 650,000 barrels per day, 1 million tonnes of polypropylene, we have 590,000 carbon black, that is the raw materials ink, dyes and co. We are expanding more. This is the first phase and we are going out to the next phase which will start early next year
Meanwhile, the company has conclude plans to buy at least 24 million barrels of US crude over the next year as it ramps up its processing capabilities.
A report by Bloomberg revealed that the $20bn refinery has issued a term tender for the purchase of 2 million barrels a month of West Texas Intermediate Midland (WTI) crude for 12 months starting in July, which amounts to 24 million barrels of crude in one year.
The call for US oil reflects Nigeria’s struggle to lift its own crude production, which remains well below theoretical capacity, as well as Dangote’s willingness to tap cheaper supplies than it can find at home. It also highlights how influential the refinery will be in global crude and fuel trading.
Elitsa Georgieva, Executive Director at Citac, an energy consultancy specializing in the African downstream sector, said: “Supply of Nigerian crude is insufficient or unavailable and sometimes unreliable. WTI on the other hand, is available, with reliable supply and competitively priced
“Buying different feed stocks also provides flexibility and optionality for the refinery, so the tender makes economic sense for Dangote,”
Nigeria has not been able to meet its Organization of Petroleum Exporting Countries (OPEC) + quota for at least a year. The nation pumped about 1.45 million barrels a day of crude and liquids in April, still far below its estimated production capacity of 2.6 million barrels a day.
Crude theft, aging oil pipelines, low investment, and divestments from oil majors operating in the country have all contributed to declining production.
To ensure enough local supply to the 650,000 barrel-a-day refinery, Nigeria’s upstream regulator, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), released new draft rules last month that will compel its oil producers to sell crude to domestic refineries. NUPRC mandated all oil companies in Nigeria to supply crude to domestic refineries that are unable to procure it locally.
Producers are allowed to export crude only after meeting these domestic supply obligations.
Under the new rules, NUPRC will act as an intermediary between local refiners and producers when agreements on crude supply are not reached, facilitating a sales purchase agreement using a willing-buyer, willing-seller model.
This new policy could benefit Dangote refinery by enabling it to procure crude oil from local suppliers rather than depending on imports. The plant, currently running at about half capacity, is taking advantage of cheaper US oil imports for as much as a third of its feedstock. Since the start of this year, it has received at least one supertanker carrying about 2 million barrels of WTI Midland each month.
An official at Dangote declined to comment on the report, Bloomberg stated.
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