10 Facts Buhari, Dangote, Godwin Emefiele Reviewed at the Commissioning of Dangote Refinery
At the commissioning of the Dangote Petroleum Refinery on May 22, 2023, in Lekki, Lagos State, Africa’s richest man and President of Dangote Group, Aliko Dangote, shared some audacious visions for his oil facility, which is expected to be released it first refined petroleum products in July 2023.
Despite being Africa’s largest oil producer, Nigeria struggles with occasional petrol shortages. In November 2022 and January 2023, Nigerians faced intense hard times due to fuel scarcity, which led to a hike in transportation costs across the country. However, yearly fuel shortages are not the only problem faced by the country with the 10th largest oil reserves globally. Nigeria currently does not refine its oil but imports refined fuel at a subsidized price, which cost the country billions of naira. According to the Central Bank Governor, Godwin Emefiele, Nigeria spent $26 billion on importing refined petroleum products and fertilizers in 2022.
While many Nigerians have expressed enthusiasm over the refinery and others doubt if the facility will help reduce the price of petrol, which currently sells between N200-230, here are 10 facts reviewed at the commissioning of the world’s largest single-train oil refinery.
Cost of building the refinery:
Plans to construct the Dangote Petroleum Refinery, located in Ibeju-Lekki, Lagos Nigeria, began in September 2013, with an initial estimated cost of $9 billion. Construction of the refinery commenced in 2016 after the facility was relocated to Lekki. The total cost of completing the project is now estimated at $18.5 billion.
Financing the Project:
According to Governor Godwin Emefiele, the Dangote Refinery was financed through a 50-50 partnership between the Dangote Group and Nigerian banks in the form of loans. The CBN Governor also mentioned that while the loan before the commissioning was $9 billion, Dangote has successfully paid down the loans to $2.7 billion.
Landmass:
The facility is situated in Ibeju-Lekki, covering an area of 2,635 hectares, which is six times the size of Victoria Island, Lagos. During the commissioning, Dangote assured that the Group would adhere to best-known standard practices in refining. However, some Nigerians have expressed concern over the potential health hazards of refining oil in Nigeria’s most populous state.
Job Creation:
With Nigeria’s unemployment rate correctly estimated at 33.3% (2020), according to the National Bureau of Statistics, the Dangote Refinery is expected to create 135,000 jobs when operating at full capacity.
The first product from the facility:
With the commissioning, Dangote Refined petrol and other petroleum products are expected to be in the market by the end of July or the beginning of August.
Types of crudes the facility can refine:
The Dangote Petroleum Refinery is designed to process a variety of crudes, including many African Crudes, some Middle Eastern Crudes, and US Light Tight Oil.
Meeting Nigeria’s petroleum consumption demand:
In September 2022, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) stated that Nigeria consumes 66.8 million litres of petrol daily. The newly commissioned Dangote Refinery, which is a 650,000-barrel single train, the largest in the world, is expected to process 100 million litres of petrol per day, enough to meet Nigeria’s requirements for all refined products.
“Our first goal is to ramp up production of the various products to ensure that we are able to fully satisfy our needs for refined petroleum products, enabling us to eliminate import dependency and stop once and for all the dumping of toxic, substandard petroleum products,” Dangote said at the event.
Exporting Refined Petroleum Products:
Aside from meeting local demands, Dangote’s refinery, when operating at full capacity, can export 40 percent of its refined products to other countries. Out of the 54 nation-states in Africa, 53 depend on petroleum exports to meet their daily oil consumption. With the refinery, Nigeria hopes to become a major global oil export player.
Electricity Generation:
One of the benefits of the Dangote refinery, according to CBN Governor, is that the facility’s 435 Power Plant can help generate about 12,000 megawatts of electricity. While Nigeria has a total installed power generation capacity of 16,384MW, the country generates less than 6,000MW. Also, the World Bank said that 92 million Nigerians are not connected to the National Grid. The refinery’s power plant can meet the total power requirement of Ibadan DisCo, covering five states: Oyo, Ogun, Osun, Kwara, and Ekiti.
Foreign Exchange (Forex):
Dependency on importation has been blamed for the decline in the value of the Naira, which has depreciated by over 200% in the last six years. Governor Godwin Emefiele, while noting that the CBN governor provided Dangote with about N120 million in cash, said the project will save the nation between $25 billion and $30 billion in forex annually and add $10 billion yearly to the nation’s economy.
