Africa’s largest petroleum refinery – the Dangote Petroleum Refinery in Nigeria – will begin production at the end of July this year to reduce import dependency and stimulate economic growth.
It will produce 650 000 barrels a day, giving it the potential to address the country’s energy supply crisis.
Owned by Nigerian industrialist and Africa’s richest man, Aliko Dangote, it is the first privately owned crude oil refinery in Nigeria. The existing refineries in Nigeria, Africa’s most populous nation and an economic powerhouse, are plagued by operational inefficiencies under government control and have failed to meet the growing demand for petroleum products. Substantial imports have become necessary.
Nigeria currently imports more than 80% of its refined petroleum products. The country is the largest importer of refined petroleum products in Africa. Local production will therefore massively cut the country’s import bill.
According to the Central Bank of Nigeria, the cost (including freight) of petroleum product imports into Nigeria doubled over a five-year period from about $8.4 billion in 2017 to $16.2bn (indicating an annual average of $11.1bn), before rising further to $23.3bn by end-2022.
The central bank says the average annual cost of petroleum product imports to Nigeria could reach $30bn by 2027 if the country continues to rely on petroleum imports.
This money can now potentially be saved, with Dangote refinery plugging the supply shortfall.