The Nigerian government has announced its commitment to prioritize domestic crude oil refining in companies like Dangote refinery, citing the staggering $74.6 billion spent on petrol exports from 2006 to 2021. Gbenga Komolafe, the Chief Executive of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), made this declaration during a high-level meeting with oil producers in Abuja on Wednesday.
Despite Nigeria’s substantial oil reserves, the nation has paradoxically remained a net importer of refined crude oil products while being a net exporter of crude oil. This predicament has significantly hampered the country’s economy.
“We all understand that if we can meet our refining obligation, we will be able to impact largely on our economy and the attendant cost of pricing the refined product,” explained Komolafe. He emphasized the importance of Nigeria becoming a net exporter of refined products, pointing out that the Petroleum Industry Act (PIA) has provisions addressing this issue. “Good enough, we have the largest refinery in Africa, the Dangote refinery. It is ready to start operation. We have received a request from the company to guarantee feedstock to the refinery, and we believe, as a nation, it will be a shame if we cannot meet up with the feedstock.”
Read also Dangote refinery to displace fuel imports by 2024 – EIU
Earlier in September, it was reported that the Dangote Refinery, with a capacity of 650,000 barrels per day, was set to receive its first cargo of crude and commence operations in October. The refinery’s initial goal was to produce up to 370,000 barrels per day of diesel and jet fuel. However, the October production target failed to materialize due to a reported shortage of crude oil from the Nigerian National Petroleum Company.
Regrettably, this marks the second time in 2023 that Dangote Refinery has fallen short of its production target. During the facility’s inauguration in May 2023, Aliko Dangote, the President of the Dangote Group, assured that the refinery would commence operations by the end of July.
Furthermore, the shortage of crude oil is not unique to Dangote Refinery alone. Five other modular refineries nationwide are also grappling with the unavailability of sufficient crude oil to support their production.
The government’s commitment to boosting domestic refining is a crucial step toward achieving energy self-sufficiency and reducing the substantial financial burden of importing refined petroleum products. As Nigeria strives to address these challenges, its economic growth and energy security depend on successfully meeting its refining obligations.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
