Owners of local refineries in Nigeria, including the Dangote Petroleum Refinery, have expressed their capability to end the country’s dependence on imported refined petroleum products within 18 months if the Federal Government collaborates with their plans.
Refinery Owners Propose Self-Sufficiency
Speaking under the aegis of the Crude Oil Refiners Association of Nigeria (CORAN), the refiners highlighted the potential of other refineries, currently in various stages of completion, to join the 650,000-barrel capacity Dangote Petroleum Refinery in meeting the nation’s fuel demands.
Collaboration and Energy Security
In an interview, CORAN Publicity Secretary Eche Idoko told The PUNCH the importance of working with local refiners to achieve energy self-sufficiency. This comes in response to recent comments by the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA) Chief Executive Farouk Ahmed, who stated that the country would not halt fuel imports to prevent Dangote from establishing a monopoly and to ensure energy security.
“You can’t tackle inflation if you don’t address the pump price of petroleum products. You cannot say you have a plan to step down inflation and you are not involving the key sectors like the refineries; you have to involve us, let’s work together,” Idoko was quoted as saying.
Addressing Crude Supply and Theft
Idoko asserted that Nigeria has sufficient crude oil to supply both the Dangote refinery and others. However, he noted that crude theft poses a significant challenge to the upstream oil sector.
“We have the crude oil to feed these refineries and more fields are being licensed by the day. So, there will be crude to feed the refineries. Our production figure is dropping because of the crude that is being stolen daily. When we have local refineries, crude theft will be reduced,” he explained.
Also Read: Crude oil supply: Dangote Refinery couldn’t agree price with IOCs
Idoko pointed out that local refineries’ proximity to oil fields would reduce the need for long-distance pipeline transport, which is vulnerable to theft.
Financial and Currency Implications
Idoko urged the Federal Government to ensure that international oil companies (IOCs) sell crude oil to local refineries at prices lower than the international market rates and to transact in naira rather than dollars. This measure, he argued, would reduce production costs and alleviate pressure on the local currency.
“Ending the importation of fuel would strengthen the naira against the dollar. The IOCs should start selling fuel directly to local refiners instead of referring them to their trading agents in Europe,” Idoko said.
Dangote Refutes Monopoly Allegations
Aliko Dangote, President of the Dangote Group, denied allegations that his refinery sought to establish a monopoly by requesting the cessation of import licences for other marketers. He emphasised the ongoing $4 billion renovation of government-owned refineries by the Nigerian National Petroleum Company Limited (NNPC) as evidence against the monopoly claims.
Public Demand for Local Refinery Support
Many Nigerians have called on the Federal Government to support local refineries to end fuel importation, hoping this would lead to lower pump prices for petrol and diesel.
Future Plans Amid Crude Supply Issues
Despite challenges with crude supply from international oil companies, Dangote recently announced that his refinery would begin supplying petrol between August 10 and 12. However, an anonymous official from the Dangote Group indicated that the refinery might consider exporting its petrol if the crude supply crisis persists.
This multifaceted situation underscores the complexities in Nigeria’s fuel supply chain and the urgent need for strategic collaboration to achieve energy security and economic stability.
