Dangote Refinery: Respite to fuel scarcity in the country
The Commissioning of the largest refinery of 650,000 barrels per day ( BPD) in the country by President Buhari led Federal government is expected to become a respite to incessant fuel scarcity in the country. This is considering the fact that federal government has been exporting raw crude oil to other countries including Ukraine to be refined and then returned to the country for consumption despite the fact that we have four refineries in the country.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) yesterday revealed that though the operations of Dangote Refinery will end fuel scarcity in the country, it will negatively affect the nation’s inflation rate as the refinery’s fuel price would reflect international competitive rate.
This is as President Muhammadu Buhari commissioned the $18 billion single-train refinery in Ibeju-Lekki axis of Lagos, with the capacity to refine 650,000 barrels of crude oil per day.
Reacting to the start up of the plant, IPMAN said the operations of Dangote refinery will force the government to sell off the nation’s four refineries, as they (government) will not be able to compete with a private business like Dangote refinery.
IPMAN Chairman in Rivers State, Dr Joseph Obele, however, congratulated the Chief Executive officer of Dangote Group, Alhaji Aliko Dangote, saying that his refinery will lead to business boom and expansions in the country’s oil and gas sector.
Obele in Port Harcourt said Dangote Refinery was a great news for Nigeria and Africa at large, but bad news to long time subsidy cabal as their reign of importation and subsidy fraudulent payment will automatically come to an end.
“It is expected that once the refinery commences operations, the pressure on Nigeria’s Naira will reduce and significant inflow of foreign currencies.
“Hopefully, there will be availability of fertilizer for farmers at a global competitive rate. There will also be availablity of Jet Fuel, ATK, PMS, DPK and AGO in large quantity, but at a global competitive rate.
“The Dangote Refinery will create over 100000 direct jobs for unemployed youths.
“Secondly, it will lead to the sales of the nation’s owned refineries, Because no government agency such as NNPCL can stand competition with a private firm like Dangote that operates the competitive game theory as strategy.
“The biggest news is it will mark the end of fuel scarcity, but a beginning of a global competitive selling price.”
Another oil stakeholder, Mr Chinedu Anyaso, Chairman of IPMAN, Enugu Community depot in charge of Anambra, Ebonyi and Enugu states, envisaged initial increase in pump price, but said it would decrease in the long run.
“They will buy locally, refine and sell locally, we will no longer need forex to import product but rather, it will sell refined products and earn us forex. It is a welcome development,” he said.
The IPMAN Chairman urged the Federal Government to revive its four refineries and optimise their production to support what Dangote would produce, to ensure full sufficiency of the products.
He thanked the President Muhammadu Buhari administration for signing the Petroleum Industry Act (PIA) which encouraged private sector investment in the oil and gas industry. Anyaso cautioned against monopoly, saying it would leave Nigerians worse off if left at the mercy of one supplier.
“We need more players to come, the market is there, so there should be competition, the Federal Government should ensure a monopoly is not created.
“The PIA which this administration graciously signed encourages private sector involvement, people who have the capacity should be encouraged to follow the Dangote example,” he added.
The federal govt should revitalise operations of all moribund depots including that of Enugu for easy distribution of petroleum products.
He said this would reduce challenges of sourcing of products and drive down prices.
The Dangote’s refinery, when completed, will bring relief to the country’s almost insurmountable challenge of importing refined petroleum products. For so many years, the country has been grappling with the intractable task of rehabilitating its four refineries including two in Port Harcourt, the Port Harcourt Refining Company with a combined capacity of 210,000 bpsd, the Warri Refining and Petrochemical Company with 125,000 bpsd capacity and the Kaduna Refining and Petrochemical Company with 110, 000 bpd. All four refineries have a combined capacity of 445,000 bpd.
Ever since the country’s four refineries packed up, successive governments in the country abandoned it and resorted to exporting crude oil to countries in Europe for refinement which imposed a heavy burden on the country because it has to go back to those countries to purchase refined products. Nigeria has been making fruitless efforts to rehabilitate the four refineries. In 2020, a total of N81.41billion was expended on the four refineries between January and August of that year, apart from billions of dollars expended by the past government to get the refineries working again.
Host communities should see the refinery as opportunity for gainful employment while the traditional rulers should launch grassroot enlightenment for the youths to support peace within the environment of the refinery.
Ultimately, the federal government in partnership with Dangote team must ensure that the refinery is sustained to maintain the drive of refining crude oil. The government should abruptly stop the exportation of crude oil to other countries since it can be refined at the largest refinery in the world.
