Owners of local refineries in Nigeria, including the Dangote Petroleum Refinery, have expressed confidence that they can end the country’s reliance on imported petroleum products within 18 months.
This ambitious goal hinges on the Federal Government’s collaboration with their plans, according to the Crude Oil Refiners Association of Nigeria (CORAN).
Eche Idoko, CORAN’s Publicity Secretary, emphasized the potential of the 650,000-capacity Dangote Petroleum Refinery, along with other local refineries in various stages of completion, to meet Nigeria’s fuel needs.
“We have the capability to produce what Nigeria will consume. In 18 months, if the Nigerian government will work with our programmes and plans, we can stop the importation of petroleum products completely,” Idoko said.
Idoko also highlighted the importance of addressing fuel costs to combat inflation.
“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,” he stated.
One major challenge facing the refineries is crude oil theft, which Idoko claims has significantly impacted production. He noted that local refineries would help reduce crude theft as producers would no longer need to pump crude through long pipelines vulnerable to theft. Instead, they could transport it directly to nearby refineries.
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Furthermore, Idoko called for international oil companies (IOCs) to sell crude oil to local refineries at prices lower than international rates and in naira rather than dollars. He believes this would reduce production costs and strengthen the naira against the dollar.
Contrary to these efforts, Farouk Ahmed, Chief Executive of the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA), expressed concerns about relying heavily on the Dangote refinery for fuel supply.
“We cannot rely heavily on one refinery to feed the nation,” Ahmed said, warning against potential monopolies and advocating for continued fuel importation to ensure energy security.
Aliko Dangote, President of Dangote Group, denied allegations of seeking monopoly, pointing out that the Nigerian National Petroleum Company Limited is renovating government-owned refineries with a $4 billion investment.
“How can we be a monopoly when there are government efforts to revive their own refineries?” Dangote questioned.
Public sentiment strongly favors supporting local refineries to stop fuel importation. Many Nigerians believe that this move would lower the pump prices of petrol and diesel, easing economic pressures on the populace.
Meanwhile, shareholders have criticized Ahmed’s claims that Dangote’s refinery produces diesel with higher sulfur content than imported products. The Pragmatic Shareholders Association of Nigeria, represented by National Coordinator Mrs. Bisi Bakare, praised Dangote for his contributions to national development and warned that undermining the refinery could deter both local and international investors.
“We must rally around Dangote refinery to provide crucial support such as crude oil allocation, cooperation from international oil companies, and regulatory agency collaboration,” Bakare emphasized.
The management of Dangote Group has also accused IOCs of frustrating crude supply to their refinery by insisting on selling through foreign agents. DVG Edwin, Vice President of Oil & Gas at Dangote Industries Limited, called for the implementation of Domestic Crude Supply Obligation guidelines to ensure direct dealings with local producers. He cited instances of inflated crude prices due to intermediaries and urged the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to address these pricing issues.