On January 24th, Nigeria’s President Muhammadu Buhari will officially be opening the Dangote Oil Refinery, the largest vertical integrated petrochemical complex in the world, which is owned by Africa’s wealthiest man, Aliko Dangote.
The refinery, situated in Lagos’ Lekki Free Zone, has the ability to process 540,000 barrels of Nigerian oil per day in its first stage of operation, and it will increase to 650,000 barrels per day later on.
The $19-billion project is a strategic move by Dangote and the Nigerian government to strengthen the country’s downstream industry and become a net exporter of refined petroleum products and petrochemicals by 2026.
By investing $19 billion in the Dangote Oil Refinery, the world’s richest black man and the Nigerian government plans to enhance the downstream sector of the economy and turn the nation into a net exporter of petrochemicals and refined petroleum products by 2026. With a capacity to process 540,000 barrels of Nigerian oil per day in its first phase of operation and increasing to 650,000 barrels per day, it is the largest vertical integrated petrochemical complex in the world, and it is owned by Africa’s wealthiest man Aliko Dangote.
In addition to oil processing, the refinery will also produce 4 million metric tonnes of jet fuel per day, 65 million liters of premium motor spirits (petrol), 15 million litres of diesel, and 3 billion standard cubic feet of gas. It’s worth noting that the Organisation of Petroleum Exporting Countries (OPEC) estimates that the Dangote Refinery will account for more than half of Africa’s medium-term refining additions, and it is the largest of all refinery additions expected across Africa in the medium term according to OPEC.
The Dangote refinery was initially scheduled to be commissioned in 2022, but it has been delayed due to a variety of factors, including lack of access to foreign currency, an ailing economy, and the COVID-19 pandemic that disrupted supply chains and caused delays in refinery equipment. The commencement of operations at the refinery is a major milestone for both Nigeria and the African continent, as it will not only supply much-needed refined petroleum products for domestic consumption but also has the potential to create a significant export market with Dangote at the helm.
How will the Dangote Refinery Impact Nigeria and the rest of Africa?
The Dangote Oil Refinery is expected to have a significant impact on Nigeria and the African continent. On the one hand, it will meet 100% of Nigeria’s demand for all refined goods and create a surplus for export, creating a market for $11 billion in Nigerian petroleum products each year. This will help to reduce the country’s reliance on imported refined products and increase its ability to meet domestic demand, thereby boosting its economy.
On the other hand, the refinery is also expected to create a significant export market for Nigerian petroleum products, which will help to diversify the country’s economy and increase its foreign exchange earnings. Additionally, it will provide jobs and other economic opportunities for people in the area surrounding the refinery.
The refinery will be the biggest of all the refinery expansions anticipated across Africa in the medium term and will account for more than half of the continent’s increase in refinery output within a short time period. This implies that it will aid in boosting the continent’s capacity for refining and lowering its reliance on imported refined goods. Additionally, it might contribute to the expansion of the African economy and the creation of jobs as well as other business prospects.
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