President Muhammadu Buhari alongside five other African leaders will today commission the Dangote refinery in Lekki Lagos.
Dangote Refinery 650,000 barrels per day (bpd) facility expected to be the biggest single refinery in the world, will according to Nigerian Economic Summit Group (NESG) add about $21 billion (N9.7 trillion at the current exchange rate) yearly to the Nigerian economy.
Recall that president Buhari’s pledge to fix state-owned refineries in Port-Harcourt, Warri and Kaduna did not see the light of the day.
However, Dangote refinery is expected to bridge the gap between crude oil export abroad for refinery.
This is coming as some stakeholders yesterday said Nigeria’s 445,000 barrels per day refineries, despite being repaired, may become obsolete and difficult to sell going by the new Dangote Refinery.
Concerns are however mounting as stakeholders, who spoke in separate interviews asked Nigerians to get ready to buy products at a higher price as they insisted that while the new refinery broke the monopoly in the sector, pricing mechanism would have to change.
In promises detailed in the APC policy document and manifesto, Buhari’s 100 days covenant, speeches at campaign rallies and town hall meetings, Buhari before winning the 2015 election, pledged to remove fuel subsidy and fix the refineries, barely nine days to leave office the promises remained a mirage.
Although the refineries have been awarded, the Port-Harcourt Refinery has failed deadlines given by the Nigerian National Petroleum Company Limited (NNPCL).
While Europe is relying on Nigeria for crude export after banning export from Russia, its previous reliance on African countries would face a yearly reduction.
Nigeria currently sends about 547.5 million barrels of crude into the international market yearly, with an agreement to supply 300, 000 barrels per day to the Dangote Refinery, adding to its regional supplies, the oil market would automatically face a shortfall of 109.5 million barrels yearly. With obligations to supply about 445,000 barrels per day, initially meant for the refineries to contractors on the Direct Sale Direct Purchase (DSDP) deal, the development could push Europe to rely more on Middle East and Asia to meet its supply while the global market could have close 700,000bpd shortfall from Nigeria.
In 2022, the West African bloc was supplying about additional 200,000 barrels per day to Europe to augment the loss from Russia.
On the product side, while the West Africa region imported about one million barrels per day of petroleum products last year, with 60 per cent of all products coming from Europe, at full capacity, Dangote Refinery alone would have reduced the import by over 65 per cent if most West African countries turn to the refinery for supply.