Ways Dangote refinery will benefit Nigeria

NIGERIA will be making huge foreign exchange savings and meeting demand for local petrol consumption following the commissioning of the much-awaited Dangote refinery by President Muhammadu Buhari on May 22.

The single largest refinery in Africa is expected to commence cargo lifting by the end of July or early August.

Foreign exchange

Industry sources say Nigeria would be saving $26 billion annually from petrochemical plants and fertiliser importation.

“Nigeria will stop importing diesel, petroleum products, fertiliser and petrochemicals. That is saving over $26 billion in foreign exchange.”

“The self-sufficiency in refined petroleum will also be achieved,” the Central Bank of Nigeria (CBN) governor, Godwin Emefiele, said at the commissioning of the $18.5 billion refinery.

He also confirmed the refinery would generate 5,000 permanent jobs and 12,000 megawatts of electricity.

Jobs and taxes

To a former president of the Nigeria Society of Petroleum Engineers, Joe Nwakwue, Nigeria would reap enormous benefits from the Dangote refinery with direct jobs and taxes being paid to both the federal and sub-national governments.

“When we export crude to Europe and import fuel, we export jobs and put pressure on our scarce foreign exchange. The refinery will save us from that and create thousands of direct and indirect jobs,” Nwakwue said.

The refinery, he added, would also make fuel available at affordable price and save us from long queues of fuel scarcity.

Subsidy

He said, “The over $12 billion spent annually on importation would be saved and have a salutory effect on our exchange rate.”

Nigeria spends an average of N4.3 trillion annually on subsidy.

“There would be flexibility in Nigeria’s foreign exchange market once the cargo lifting commences. Gas is also a low-hanging fruit for the in-coming government if they can really pay closer attention to it,” a development economist, Kelvin Emmanuel, told The ICIR.

Oil importation 

The Dangote refinery has strategically positioned Nigeria’s oil and gas market for the global business opportunities.

Most oil majors at the commissioning were said to be match-making their businesses and looking towards bringing in their cargoes here.

For some economic watchers, this is a major signature to Nigeria’s industrialisation.






     

     

    The huge pull of capital into the economy from this project would have significant multiplier effects, Emmanuel noted.

    The Dangote refinery has the capacity to produce 650,000 barrels of crude a day, and meet Nigeria’s local consumption needs.

    It is powered by a 435-megawatt power plant.

    At full capacity, it can meet 100 per cent of the home requirements of all refined products, as well as meet export targets. The refinery was designed to process 100 per cent Nigerian crude, with the flexibility to process other varieties of crude, including many African countries’ crude, some middle eastern crudes, and the United States’ light-tight oil.

    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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    5 COMMENTS

    1. Let us know what kind of direct benefits Nigerians will get from the Dangote’s refinery especially in term of good prices of the refined products since the conveyance cost to and fro will not be there anymore; At least the crude oil shall be refining here in Nigeria. Pls, give us adetails and precise answer to this for it will surely avail us (Nigerians), wound/ pain healer. Thanks

    2. There are other issues to consider on this refinery.

      Note that the Refinery is built on Free Trade Zone which eliminates any form of duties being paid for exports. Hence, It is more favorable for the Dangote Refinery to exports her products than sell locally here in Nigeria.
      Meanwhile, note that crude oil is sold and bought at international price set by OPEC. Hence, what different would it make on the cost of Petroleum Products since the Dangote refinery will still buy crude from NNPC at international rate and instead of even paying in Dollar so as to increase our FX earning, he will be allowed to pay in the equivalent of Naira.

      Have you wondered why cements being produced in Nigeria sells more expensive in Nigeria than it sells in other African Countries?

      Dangote Refinery will rather sell off her Products to other countries who are to buy with dollar than sell locally.

      The Dangote refinery being situated at the Free Trade Zone was a sharp move by the Man and other stakeholders.

      The way I see it, one of the main benefits to Nigeria is the jobs and opportunities it might create for a few Nigerians. Other than those, it might not be as benefiting as a lot of Nigerian thinks.

      Peace.

    3. If nigerian stepped spends 4.3trillion annualy on subsidy’ and get 26billions on taxes from Dangote Refinery. its means Nigeria can buy Fuel Fertilizer to Export it in orther African countries’ this Dangote Refinery its make nigeria to be as Exporter”

    4. With this refinery, can Nigerian be buying fuel @ #200 after subsidy remover.

      Regards.

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