Dangote refinery’s December production date shaky as marketers rely on NNPCL

MAJOR marketers still rely on the partnership with the Nigerian National Petroleum Company Limited (NNPCL) to meet their fuel importation demands as Nigeria’s currency problems linger and affect licenced importers.

The naira conundrum may significantly affect the much-expected 650,000 barrels-a-day Dangote refinery, hoping to commence operations this December.

“Dangote refinery coming on stream may not be feasible for now. There are lots of issues, and they are complicated ones,” an oil sector governance expert, Henry Ademola Adigun, told The ICIR.

Adigun noted that the refinery was affected by financing, with Nigeria’s currency problem playing a major role.

Africa’s richest man, Aliko Dangote, has had his assets, just like many Nigerians, affected up to 40 per cent by the naira devaluation by the Central Bank of Nigeria (CBN).

Dangote had repeatedly shifted the dates for the commencement of his refinery’s operation, which raises further concerns about Nigeria spending scarce foreign exchange on fuel importation.

In a recent report by the Financial Times of London, Dangote was quoted to have said, “Provided Dangote group can secure sufficient crude oil and the long-delayed plant works as it is supposed, the refinery could start churning out diesel, kerosene and jet fuel as soon as next month. We’re starting with 350,000 barrels a day.”

He added that a deal had already been sealed for the “first cargo of about six million barrels” for delivery in December.

Dangote believes the refinery could reach its capacity of 650,000 barrels a day by the end of 2024.

He said there were times when he thought the massive project might jeopardise his business empire.

As several major marketers struggle to rely more on the NNPCL for their fuel importation, the yuletide season could witness a resurgence of longer queues as other marketers struggle to find foreign exchange for their imports.

    “I can’t believe completely what I read in papers for now unless I’m told to come and pick up fuel from Dangote as major marketer. That is when I’ll believe on the December set date,” a major oil marketer and former chairman of the Major Marketers Association of Nigeria (MOMAN) Adetunji Oyebanji told The ICIR.

    Commenting on queues in Abuja, he said Nigerians chose to buy more from the national oil company since it maintains its price peg of N617.

    “As for queues in Abuja, what is happening is that private, non-governmental owned oil marketing companies are trying to move closer to a more market reflective price of the market fundamentals.

    ” Some of them who get supply from NNPCL also had to put their mark-up price to still be in business,” he added..

    Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.

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