Gigantic New Oil Refinery Inaugurated In Nigeria. But Has It Access To Local Crude Oil?

Africa | Commentaries | Energy & Enviroment | Manufacturing | Nigeria May 23, 2023

A gigantic new oil refinery was inaugurated in Lagos, Nigeria, on May 22, 2023, reported some media. The refinery owned by billionaire entrepreneur Aliko Dangote and called Dangote Refinery, is said to have been built at a cost of $19 billion.

Reportedly, Dangote Refinery becomes Africa’s largest oil refinery with a capacity of generating 650 000 barrels of refined fuel per day. The refinery complex will also produce fertilizers, and other petrochemical products.

Strangely, however, some media reports say that Dangote Refinery that is expected to begin production in July 2023, has not yet reached any crude oil purchase deal with firms that extract crude oil in Nigeria. As such, the gigantic new refinery may be compelled to import crude oil from abroad for its operations.

If that is true and the situation do not change quickly, that will not be good news for Nigeria because one would have expected the new refinery to enable the ECOWAS nation add value to some of its extracted crude oil hence benefit more from it in terms of increased revenues and creation of jobs.

Currently, Nigeria is experiencing acute fuel shortages despite been Africa’s largest crude oil producer. Most of the crude oil it produces through some foreign firms like Shell is exported while the country imports refined fuels from abroad. The imported fuel may even be from its own exported crude oil!

Dangote Refinery could change all that though, but it must have unlimited access to Nigerian crude oil. That could be done by an appropriate bold policy by the government there that will give local refineries prioritized access to extracted crude oil. The government can do that because the crude oil is a natural asset that is owned by Nigeria.

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