Owners of local refineries in Nigeria, including the Dangote Petroleum Refinery, assert that they can eliminate the nation’s reliance on imported refined petroleum products within 18 months if the Federal Government collaborates with their strategies.
Speaking under the Crude Oil Refiners Association of Nigeria (CORAN), the refinery owners emphasized that multiple refineries at various stages of completion could complement the 650,000 barrels-per-day capacity of the Dangote Petroleum Refinery.
In an interview with The PUNCH, CORAN Publicity Secretary Eche Idoko highlighted the potential of domestic refineries to meet the country’s fuel demands.
This statement comes amidst remarks by Farouk Ahmed, Chief Executive of the Nigerian Midstream and Downstream Regulatory Authority, who stated that Nigeria would continue fuel importation to prevent a monopoly by Dangote and ensure energy security.
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Idoko stressed that addressing the high cost of fuel, a significant contributor to rising inflation, is crucial for economic stability. He argued that the government could not effectively combat inflation without reducing fuel costs, which local refineries could achieve if supported properly.
Nigeria, endowed with ample crude oil resources to supply both the Dangote refinery and other domestic refineries, faces a major obstacle in crude theft within the upstream oil sector. Idoko pointed out that international oil companies (IOCs) should sell crude oil to local refineries at prices below the international market rate to foster local refining.
Furthermore, Idoko urged the Federal Government to mandate that crude oil transactions with local refineries be conducted in naira rather than dollars. This move would lower production costs and alleviate pressure on the local currency, thereby strengthening the naira against the dollar.
He also recommended that IOCs sell crude directly to local refiners, bypassing their European trading agents to streamline the process and reduce additional costs.
Ending fuel importation, according to Idoko, would not only enhance the value of the naira but also ensure a more stable and self-sufficient fuel supply for Nigeria.
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The cooperation between the Federal Government and local refiners is essential to achieve this goal, promoting economic resilience and reducing the nation’s dependency on foreign refined petroleum products.
The NMDPRA head previously cautioned against Nigeria’s heavy reliance on the Dangote refinery for fuel supply, noting that the refinery had asked the regulator to cease issuing import licenses to other marketers.
However, Dangote Group President Aliko Dangote refuted this claim, questioning the monopoly accusation given that the Nigerian National Petroleum Company Limited is refurbishing state-owned refineries with a $4 billion investment.