First cargo from $18bn Dangote refinery to arrive market in August

THE first cargo from the $18.5 billion Dangote Refinery and Petrochemical Company, Ibeju-Lekki, Nigeria, which was commissioned on Monday, May 22 will be available in the market by the beginning of August 2023.

The 650,000 barrels per day (bpd) refinery, expected to save Nigeria from spending scarce foreign currency earnings on importing petroleum products and subsidy payments, was commissioned by outgoing president, Muhammadu Buhari.

The president and chief executive officer of the Dangote Group, Aliko Dangote, told dignitaries at the occasion that the refinery was borne out of the desire for Nigeria’s economy to become a key player in the global competitive oil market.

Dangote enthused that the refinery would support and contribute to the Federal government’s plan to transform and position Nigeria’s economy in the global market.

He said, “Our first product will be in the market before the end of July and beginning of August this year. Our investment of over $18.5 billion in this industry has been prompted by our desire to support and contribute our quota to the Federal government to sustain airports, the transform our economy and properly positioned.”

He said the petroleum products would be exported to neighbouring west African countries, and to meet the continent’s petroleum demand, adding that it would advance Nigeria’s commitment to creating a common market in the continent.

He said, “We expect that, at least, 40 per cent of the capacity will be available for export and this will result in significant foreign exchange earning into the country.”

Dangote stressed his commitment to ensuring that the refinery is committed to adopting international best practice in line with global standard, and promoting an eco-friendly environment.

“We are committed to operating our plan in line with international best practice, recognising the importance of the environment. We have adopted the stringent environmental, health and safety policies to ensure that the refinery operates a safe and sustainable manner,” he said.

The entrepreneur applauded the Lagos State government for providing an investment-friendly environment that made it possible for the group to invest in the state.

In a report by The ICIR, an energy expert, Najim Animasaun, stated that Nigeria’s hope of ending subsidy payments on petroleum import would be brightened after the inauguration of the refinery.

Animasaun was optimistic that the subsidy regime would end if the Dangote refinery performed optimally with almost 51 million litres daily production.

“Possibly, with this development subsidy will go,” Animasaun told The ICIR.

The ICIR further reported that the integrated refinery project would be a big relief to the Federal government, which is spending almost N6 trillion on fuel imports this year.

The Lagos Chamber of Commerce and Industry (LCCI) had also expressed optimism that the refinery would create and broaden investment opportunities in Nigeria’s oil and gas sector.

The Director-General of the LCCI, Chinyere Alumona, is expecting the refinery to provide product sufficiency for Nigeria.

Almona asserted that the LCCI viewed the refinery’s impact on the Nigerian economy as significant, and underlined its huge prospects for the Nigerian economy, saying it would enable the country save and as well generate foreign exchange.

She said, “The refinery will create jobs and positively affect the value of the naira, broaden prosperity for the downstream sector, and provide growth opportunities for businesses. It will also stimulate economic growth by impacting the country’s balance of payments.”

The ICIR had reported in 2022 the governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, saying the Federal government would put a stop to petroleum subsidy once local consumption demand was met after the Dangote refinery had come on stream.

Emefiele said meeting local refining demands would prune logistics costs and other related charges associated with fuel import.

He said, “When you see people talk about removal of subsidy, I support it. When people talk about holding on to it till we get the right time, I support it also. You heard the Finance Minister say we decided to defer the policy on subsidy removal till sometime next year when we’re sure Dangote refinery has fully taken off.

“What does that mean? It means it is easier for people to find the petroleum product and pay in naira, rather than the importation troubles we are going through. You’ll find that the price would be a little bit high and Dangote himself would procure the crude, out of 445,000 barrels per day.”

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