In a resounding affirmation of private sector-led investment, the Dangote Group has announced that its $20 billion refinery was constructed without financial incentives or subsidies from the Nigerian government.
This was announced on Tuesday, October 8, 2024, at the Crude Oil Refinery Owners Association of Nigeria (CORAN) Summit in Lagos, themed “Making Nigeria a Net Exporter of Petroleum Products.”
Mansur Ahmed, the Executive Director of the Dangote Group, who represented Aliko Dangote, the conglomerate’s president, stated that the refinery’s success was driven purely by private sector funding.
“We built the Dangote refinery without a single incentive from the government, signaling a major achievement for Nigeria’s refining industry.” Ahmed emphasised.
The refinery, which boasts a capacity of 650,000 barrels per day, is Africa’s largest and was commissioned in 2023 under former President Muhammadu Buhari.
Though it faced initial delays, it began supplying petroleum products to the local market in April 2024, starting with diesel and jet fuel.
Ahmed highlighted the importance of boosting domestic crude supply to ensure the refinery’s continued success.
He pointed out the need for Nigeria to stop “mortgaging crude” and instead expand production capacity.
He also praised President Bola Tinubu’s administration for its proactive steps in fast-tracking international oil company (IOC) divestments and other initiatives to strengthen local oil production.
Despite the Dangote Group’s independence in the project, Ahmed acknowledged that, going forward, government incentives would be crucial in encouraging further investments that could transform Nigeria into a regional refining hub.
He acknowledged that with disruptions in global petroleum trade flows, particularly in Europe, Nigeria is uniquely positioned to seize new opportunities in the global oil market.
“This strategic positioning has already led to an agreement between the federal government and the Dangote Refinery on the commercial terms for crude supply, petrol, and diesel off-take.”
“As part of this agreement, the refinery will initially supply 25 million litres of gasoline daily from its Lagos-Lekki Free Zone facility, marking a significant boost for Nigeria’s fuel supply. This move further cements the country’s position as a leader in Africa’s refining industry.” Ahmed Concluded.
By Ibe Wada
