Africa Spending Future Oil Proceeds In Advance, Says Dangote

Nigerian billionaire and Chief Executive Officer of the Dangote Refinery, Aliko Dangote, has disclosed that his $20 billion refinery was built without receiving any incentives from the Federal Government.

He, however, noted that the FG needs to provide incentives to investors to make Nigeria a top refining hub.

“We built the Dangote Refinery without a single incentive from the government. However, to achieve the vision of turning Nigeria into a refining hub, investors need to be incentivised,” Dangote, who was represented by the company’s Group Executive Director, Mr Mansur Ahmed, stated this on Tuesday at the inaugural edition of the Crude Oil Refiners Association Summit, with the theme, ‘Making Nigeria A Net Exporter of Petroleum Products.’

He called for the implementation of the Domestic Crude Supply Obligation as enshrined in the Petroleum Industry Act 2021, in a bid to ensure sufficient feedstock availability for local refineries.

He said, “It is unfortunate that while countries like Norway are putting oil proceeds into a future fund, in Africa, we are spending oil proceeds from the future. We will also need to prioritise the implementation of the domestic crude supply obligations.

“We will need to expand our crude oil production capacity to support demand from new refining capacity,” adding that this can be achieved by building “1.5 million barrels per day of refining capacity. This will not be an easy feat and strong government support will be required to achieve this.”

“The government of President Bola Tinubu is taking active steps to achieve this through fast-tracking IOC divestments and other initiatives,” he added.

It was reported that the supply of crude oil in naira to the 650,000 barrels-per-day refinery by the Nigerian National Petroleum Company Limited is to last for six months in the first instance, pending a further review by the Technical Sub-Committee on Domestic Sales of Crude Oil in Local Currency.

Multiple sources from the committee and the Dangote refinery confirmed on Monday that the naira-for-crude deal would last six months in the first phase because crude oil, being an international product, is priced in dollars.

The billionaire stressed the significance of Nigeria’s crude oil exportation, saying such is capable to generate more revenue for the government.

He added, “As a vibrant exporter of refined products, Nigeria will witness an improvement in its balance of trade and generate the much-needed foreign currency. Nigeria’s potential as a refining hub is clearly not in doubt, let’s work together to make it happen.

“Nigeria and Africa can become completely self-sufficient and we can keep all the value on our shores. We have done it in Cement, and we can certainly do it for petroleum products.

“It is worth noting that the Dangote refinery already produces sufficient diesel and jet fuel to meet Nigeria’s demand.”

The FG, through the Minister of Aviation and Aerospace Development, Festus Keyamo, on Tuesday, said the Dangote Refinery had been approved as the exclusive supplier of jet fuel for Nigeria’s airline operators.

Source:- Punchng