The Dangote Group, one of Africa’s largest conglomerates, has announced that it constructed its $20bn billion-dollar refinery without any financial incentives or subsidies from the Nigerian government.
The company made this known today at the Crude Oil Refinery-Owners Association of Nigeria (CORAN) Summit themed, “Making Nigeria a Net Exporter of Petroleum Products” in Lagos, Nigeria’s commercial capital.
“We built the Dangote refinery without a single incentive from the government,” Aliko Dangote, president of Dangote Group who was represented by Mansur Ahmed, executive director, of Dangote Group said on Tuesday at the refining summit.
Ahmed explained, “To achieve the vision of turning Nigeria into a refining hub for the region, investors need to be incentivised”.
The refinery’s construction has been closely watched by investors and policymakers alike, with many expressing optimism about its potential impact on the Nigerian economy. Some have argued that the government should have provided incentives to support the project, given its significant economic benefits.
Read also: Dangote to take 400,000 bpd of Nigerian crude
However, the Dangote Group has maintained that the refinery’s success is a result of its private sector-driven model.
The 650,000 barrels per day capacity refinery, billed as Africa’s largest oil refinery, was commissioned in 2023 by former President Muhammadu Buhari after years of delays and a week before stepping down from office.
However, it wasn’t until April 2024 that the plant started supplying petroleum products to the local market, starting with diesel and jet fuel.
Ahmed said: “To ensure sufficient feedstock availability, we will need to stop mortgaging crude. We will also need to prioritise implementation of the Domestic Crude Supply obligations.
“We will need to expand crude production capacity to support demand from the new refined capacity. The government of President Bola Tinubu is taking active steps to achieve this through fast-tracking the IOC divestment and other initiatives.
“Global developments in the petroleum sector, particularly in Europe, will disrupt historical trade flows to refined petroleum products in Africa. Nigeria is uniquely positioned to take advantage of this opportunity and be a formidable player in the global oil industry.”
Last month, the federal government reached an agreement with the management of Dangote Refinery on the commercial terms for the supply of crude oil to the refinery and the off-taking and distribution of petrol and diesel from the facility.
Following the agreement, the government announced that the distribution of petrol from the 650,000 barrels per day Lagos-Lekki Free Zone-based facility would commence with an initial 25 million litres per day.
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