The Dangote Refinery has the potential to alleviate Nigeria’s petrol import and shortage concerns, according to a new report.
- According to the report, the refinery’s commissioning will provide enough gasoline output for domestic consumption.
- This would result in surplus products for exports, as well as guaranteeing local currency stability and boosting economic growth.
According to a recent study, the Dangote Petroleum Refinery, with a capacity of 650,000 barrels per day, is projected to alleviate Nigeria’s petrol import and shortage concerns.
According to the Chapel Hill Denham report titled “Dangote Refinery can provide the needed breather for Nigeria’s public finances,” when completed, the Dangote refinery will be the largest in Africa, surpassing Algeria’s Skikda refinery (366kb/d capacity) and Nigeria’s current largest refinery, the Port Harcourt Refinery (210kb/d capacity).
According to Nairametrics, the refinery would provide a light of optimism despite the current fuel crises, which have been exacerbated by the FGN’s incapacity to process even a drop of crude oil domestically.
Chapel Hill Denham highlighted that despite having four refineries with a total capacity of 445 kb/d, Nigeria is still heavily reliant on imported petroleum. However, when fully operational, the Dangote refinery is planned to produce up to 66 million litres of PMS, ATK, AGO, HHK, slurry, and other petroleum products while refining 650 kb/d of crude.
“We feel that change is on the way, with the Dangote Refinery set to commence operations in the late summer of 2023.” If fully used, we think the refinery has the ability to redefine Nigeria’s domestic production of white goods (petrol, Automotive Gasoline Oil, AGO, and Dual Purpose Kerosene, DPK) and transform the country into a net exporter.”
Despite widespread optimism that the refinery will alleviate Nigeria’s fuel import and shortage issues and enhance economic growth, the country’s economic experts remain pessimistic about the refinery’s prospects.
According to Business Day experts, if the refinery begins operations this year, it will generate just 10% of its capacity this year, and 20% next year. It will not reach full capacity until after 2025, and under these assumptions, the refinery’s contribution to GDP growth in 2022 and 2023 is more likely to be 0.1 and 0.4 percent, respectively.
Aliko Dangote, President of Dangote Group, stated that the refinery can fulfill 100% of Nigeria’s demand for all liquid products such as gasoline, diesel, kerosene, and aviation jet. It will also have an excess of each of these things available for export.
He stated that after all of the projects are completed, it will be able to produce approximately 280 000 direct and indirect employment.