Aliko Dangote: 5 Things that’ll Happen When His Oil Refinery Launches
The launch of the Aliko Dangote oil refinery is expected to significantly impact Nigeria’s economy. The refinery, which is the largest single-train refinery in the world, has a capacity of 650,000 barrels per day. This is equivalent to about 103 million liters of refined petroleum products per day.
Located in the Lekki Free Zone area, Lagos state, The Dangote Refinery covers a land area of approximately 2,635 hectares. The refinery’s pipeline infrastructure of 1,100 kilometres handles three billion Standard Cubic Feet per day (Scf/d) of gas and has been described as one of the largest in the world.
With just a few days away from the launch, let’s take a look at five things that will happen when the refinery commences operations.
Aliko Dangote Oil Refinery will engender economic growth
As a major oil and gas producer, Nigeria recorded a great level of economic growth when oil prices rose. With the launch of Dangote’s oil refinery on the 22nd of May, 2023, Nigeria’s economy is predicted to grow. This is because the refinery is billed to create about 40,000 thousand jobs that will improve the lives of millions of Nigerians.
According to the Lagos Chamber of Commerce and Industry (LCCI), Dangote’s oil refinery is also expected to positively affect the value of the naira, increase prosperity for the downstream sector and provide opportunities for business growth.
Speaking about the refinery, the president of the African Development Bank (AfDB), Akinwumi Adesina said, “These projects will reverse the huge sum the nation spends on foreign exchange, when you look at how much we import, it is about $57 billion worth of different products and we export only about $50.4 billion, so we have to balance that with about $7 billion and talking to them here, they showed us that they can have a domestic market of about $11 billion and that is an incredible market and that will save Nigeria about $9 billion dollars, a year from importing petroleum products, so this is huge for Nigeria and even for Africa as a continent.”
It will broaden Nigeria’s investment portfolio
Another important thing that will happen when Aliko Dangote launches his oil refinery is that Nigeria will become a more attractive destination for investment. The oil refinery design which complies with the World Bank, US EPA, European emission norms and Department of Petroleum Resources (DPR) emission/effluent norms could strengthen investors’ trust in the Nigerian economy.
Designed to process a large variety of crudes, the refinery is expected to fuel growth across its value chain including cosmetics, plastics, and textiles among others that will be of interest to investors. When Nigeria becomes a strategic exporter of refined petroleum products, the nation will attract foreign capital investments.
The price of petroleum products will fall
Since the Dangote oil refinery will reduce imports, the price of gasoline and petroleum products will fall. Nigerians will no longer have to spend huge amounts of money on petroleum products as there will be an increase in the supply of refined petroleum products in the country.
Described as the largest oil refinery in Africa with a 435 MW power plant, Dangote’s oil refinery is capable of generating the total power requirement of 860,316 MWh covering five states in the southwest region of Nigeria. Speaking about the potential of the refinery, the Director General of Nigeria Employers’ Consultative Forum, NECA, said the refinery has the capacity to meet 100 per cent of Nigeria’s consumption of all liquid products, including gasoline (PMS), Diesel (AGO), kerosene (DPK) and aviation jet fuel (Jet A-1)
Nigeria will become self-sufficient in refined petroleum products
Aliko Dangote’s oil refinery will make Nigeria which is currently the largest importer of refined petroleum products in Africa, self-sufficient in refined petroleum products. Reports say 60 per cent of the oil production capacity of this petroleum refinery could meet the entire consumption needs of the country. While 40 per cent would be exported to generate a huge amount of foreign exchange that would impact positively on Nigeria’s balance of payment.
Nigeria’s oil self-sufficiency also will lead to the mass exportation of finished products and the availability of petroleum products. Furthermore, It will make it easier to have conversations around subsidy removal.
Dangote’s oil refinery will make Nigeria a regional energy hub
The launch of Aliko’s refinery will empower Nigeria with the capacity to export refined petroleum products to other countries in Africa and beyond. When this happens, Nigeria is going to become a regional energy hub. This means that Nigeria can actively take on roles in the global energy system. Also, it can boost Nigeria’s economic and political influence.
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