Tinibu’s Renewed Hope-Revitalizing the Oil Sector Amidst Dangote’s Refinery – By Mexziss Tom
Nigeria is Africa’s largest producer of crude oil, it is also raked 15th out of the 195 countries of the world in its crude oil production.
Despite the high profile and peg, none of the four Nigeria’s government-owned refineries are functional and the most populous black nation and acclaimed giant of Africa always faces energy challenges.
Infact, on can postulate that, our dilapidated refineries have turned out to be a pinpoint where many administrations used, to smoothly milk out of the countries treasuries with claims to prod it’s turnaround maintenance.
Record has it that Nigeria has spent nothing less than 10 trillion naira ($67 billion dollars) for two decades now without producing any reasonable results on those refineries or bringing them back to lives.
It seems most of the past administrations were more comfortable with the exportation of crude oil and the importation of its refined products because, that is an easy route where the big boys make their cool cash at the detriment of the nation.
Since the emergence of President Bola Ahmad Tinibu, the petroleum sector of this country has undoubtedly assumed a new shape. From his subsidy Removal pronouncement, to some of his led approaches on plagues surrounding the petroleum sector, Nigeria is unarguably on the verge of coming back to its glorious days.
After the subsidy removal and the the quest to trim the country’s reliance on importation. President Tinibu didn’t go on the same usual path to rely on reviving any State-owned refineries. But instead, he opted for a different approach by giving Aliko Dangote a collaborative platform to commence work in his new refinery. Putting almost all Nigeria’s hope on Dangote and that has not only be of advantage due to his Refinery capacity, but because being a private sector with such a tremendous responsible, it will apprise him to promote transparency and efficiency in his service.
This is similar approach to one of a convincing point I picked out in Atiku’s campaign manifestos of privatizing the NNPC if he assumed power as the president and hold them accountable for any mismanagement. Honestly speaking, Nigerians have lost hope on NNPC and their importation methods. Infact, the intervention of Dangote’s refinery is very timely.
The Dangote refinery which is over $20 billion of worth, situated in Lekki, Lagos State Nigeria. It Is about the size of almost 4,000 football pitches, an Africa’s largest oil refinery, world’s biggest single-train facility and it has the capacity to produce 650,000 barrels of fuel per day (BPD) if it’s fully functional.
That means, the Refinery can supply more than Nigeria’s required usage of only 480,000 barrels per day. Meeting Nigeria’s 100% needs of all refined products required and its surplus can also be supplied to the some West African nations, other regions of Africa and some of it can still be exported to Europe and Asia
After the refinery received its first crude oil supply and commenced work in December 2023, it has faced alot of challenges to stand the test of time among which are;
* Dangote was accused of monopolizing the oil sector which almost led to his decision of selling off the refinery before President Bola Ahmad Tinibu intervened.
* NNPC trying to instigate a competition by trying to resuscitate other State-owned refinery that has been death for two to three decades now.
* NNPC stalling to supply crude oil to the Dangote’s refinery at a time and it had to purchase crude oil from USA. President Tinibu also intervened and it was resolved.
* The fire outbreak in the refinery that was alleged to saboteurs trying to truncate the stability of the refinery. Though there was no adequate proves on this.
*NNPC failing to pay for their 20% agreed share but instead paid only 7% out of it. Claiming that they could not afford the agreed 20% shares and so many others challenges.
Despite all this challenges, the Dangote’s refinery is still forging stronger. His refinery was 50% self-fund and 50% loan. About $5 billion dollars loan was procure and in less than a year of active service, 2.4 billion has been repaid with $2.7 bullion left. This shows that there are all positive omens that the refinery has come to stay.
The refinery begun the supply of diesel and aviation fuel to marketers since January and the refinery has started exporting jet fuel to Europe. Dangote, recently unveiled a sample of the first refined petrol from his refinery some days back and he claimed that the petrol will be able to hit the market within 48hours. 2,900 fuel trucks can be supplied daily and all this vehicles will be tracked. That means, an external factor cannot hijack or divert those trucks on the quest of distributions.
This shows how fast, rapid and transparent his products can go into circulation within the country to meet the 4,800BPD demand by Nigerians. Thereby, giving no room for fuel scarcity and the end of those long queues at the gas stations have come to an end in Nigeria.
This new development will have a massive impact on our foreign exchange, It will also not only save us the $30 billion usually spent on fuel importation annually and it will also give us a $10 billion profit.
When this refinery will be at full working capacity, it’s will ease NNPC’s the strain to supply the local market. At the moment, NNPC is struggling with a debts of $6 billion to oil traders for supply since January, as reported by Reuters.
This has not only affected its ability to supply the local market where fuel queues have been very intensed, but it has also caused the recent increase in fuel price.
With the new PMS Production from the Dangote’s refinery, a new price of petrol will be determined through an agreement between his company, NNPC and the federal government. The new agreement will come with a very big relief for Nigerians. That means, the federal government and NNPC will play an integral role in setting the new price of this new and great achievement by Dangote’s refinery.
“This negotiation has not been done yet as of today 4th September.”
This milestone achievement is very much in correlation with the strides of President Tinubu’s Renewed hope administration in quest to promote economic diversification and trim the country dependence on importation. It will also have a great impact on our GDP growth and it will help the Naira to accent rapidly. That will lead to a reduction in prices essential and non essential commodities.
The New Nigeria is here and this was accomplished by the game changer His Excellency President Bola Ahmad Tinibu. This is not only a win for the country, but it’s a win for Africa at large. Congratulations to us all.
