Nigeria’s journey toward petroleum self-sufficiency hinges on a critical need for enhanced refining capacity, as highlighted by Aliko Dangote, the wealthiest man in Africa and the President of Dangote Industries Limited. In a recent interview, Dangote underscored that the country must achieve approximately 1.5 million barrels per day (bpd) in local refining capacity to realize energy independence. He also introduced his impressive $20 billion refinery, designed with a capacity of 650,000 bpd, which he developed without any government incentives.
During the inaugural CORAN Summit, themed “Making Nigeria A Net Exporter of Petroleum Products,” Dangote’s perspective was echoed by Mr. Momoh Oyarekhua, the National Chairman of the Crude Oil Refinery Owners Association of Nigeria (CORAN). Oyarekhua expressed concerns over persistent challenges stemming from a lack of feedstock for local refineries, despite a presidential order aimed at ensuring crude availability.
In a significant move, the federal government has designated Dangote’s refinery as the exclusive supplier of Jet A1 fuel for Nigerian airlines, a decision confirmed by the Minister of Aviation and Aerospace Development, Festus Keyamo, during a television interview. Keyamo noted that airline operators welcomed this arrangement.
At the summit, Dangote emphasized the essential role of proactive government support and collaboration among industry stakeholders in achieving Nigeria’s goal of becoming a net exporter of petroleum products. His keynote address was presented by Mansur Ahmed, Group Executive Director of Dangote Industries.
Situated in the Lekki Free Trade Zone near Lagos, the refinery is recognized as the seventh largest and the world’s largest single-train refinery. It began producing white products like diesel and aviation fuel in January 2024, with recent additions including Premium Motor Spirit (PMS), commonly known as petrol. Despite these advancements, Dangote reiterated the necessity for increased production of diesel and jet fuel to satisfy local demand and assured attendees that products from the refinery are being exported to various international markets, including Europe, Brazil, the UK, and the US.
To position Nigeria as a leading refining hub, Dangote urged an expansion of refining capacity to 1.5 million bpd and proposed that the government cease leveraging crude oil, thereby ensuring a stable supply of feedstock. “Countries like Norway invest their oil proceeds into future funds, while we seem to be spending our future earnings,” he remarked, calling for the implementation of domestic crude supply obligations to bolster local refining viability.
Dangote expressed confidence that Nigeria could achieve self-sufficiency in petroleum products, mirroring the success observed in the cement industry. He encouraged attendees to unite in transforming Nigeria into a refining powerhouse.
Mr. Oyarekhua also articulated concerns regarding the nation’s ongoing dependence on imported petroleum products, emphasizing that of the 1,222 bpd of combined installed refining capacity, 750,000 bpd is necessary for self-sufficiency. He lamented the harsh reality that Nigeria continues to import all of its petroleum products, despite having abundant crude resources. This dependency arises from challenges such as inconsistent crude oil supply, frequent pipeline vandalism, and regulatory hurdles that inhibit local refining efforts.
He stressed the importance of a collaborative approach among producers, refiners, and infrastructure operators to unlock Nigeria’s refining sector’s full potential. “We need to implement supportive regulations that attract investment and promote smoother operations across the board,” Oyarekhua stated.
In closing remarks, Keyamo reaffirmed the government’s commitment to a naira-only purchase agreement for crude with Dangote, which he indicated would stabilize prices against international fluctuations and ensure a more predictable supply chain for Jet A1 fuel, granting airlines access to cost-effective aviation fuel.
