Africa’s largest oil refinery had begun production in Nigeria, according to analysts on Monday. The new plant is expected to increase refinery capacity in a region that is largely reliant on petroleum imports.
The refinery is located on the outskirts of Lagos, the country’s economic hub, where it operates beside a fertiliser plant. Moreover, it belongs to Nigerian industrialist Aliko Dangote.
According to the Dangote Petroleum Refinery company report on Saturday, the $19 billion facility, which can produce 650,000 barrels of fuel per day, is now producing aviation fuel and diesel.
The project “is a game-changer for our country,” the statement included, being Nigeria’s first privately owned oil refinery.
Notably, Nigeria, one of the major oil-producing countries in Africa, imports refined petroleum products for domestic use. The majority of the country’s state-run refineries run well below capacity due to inadequate maintenance, which has caused the oil and natural gas industry to struggle for many years.
Olufola Wusu, an oil and gas specialist who was a member of a team that assisted in reviewing Nigeria’s national gas policy, claims that the Dangote refinery was “not a silver bullet” for the country’s energy crisis.
However, it’s a fantastic method to bring the industry back to life and will assist the county in transitioning from being a significant importer of refined petroleum products to having enough capacity for its domestic refining.
At full production capacity, the plant should be able to supply all of Nigeria’s needs for gasoline, diesel, kerosene, and aviation jet fuel, according to Dangote, who announced the facility’s opening last year.
According to the company, at least 40 per cent of the oil products produced there would be exported.
Nigeria’s state oil company, NNPC Limited, has supplied the plant with roughly 6 million barrels of crude oil so far to get it going. However, analysts estimate that it may take several months for the refinery to reach its maximum capacity.
The plant is giving hope that consumer gas prices could increase, which, following the government’s termination of decades-long subsidies a year ago have tripled.
However, according to analysts, any influence on prices would still be contingent upon market factors like the price of crude, government actions like subsidies, and the exchange rate between the local currency and the US dollar.
