The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, has projected that the establishment of the Dangote refinery would create opportunities for “Nigerian businessmen” when supply eclipses demand of the refined products in Nigeria.
Emefiele added that following an agreement between oil corporations and the Nigerian National Petroleum Corporation (NNPC), the Dangote refinery will sell refined oil to Nigerians in naira, as it would be buying “its crude oil in naira”.
The CBN governor stated this, according to the News Agency of Nigeria (NAN), at the sites of Dangote Refinery, Petrochemicals Complex Fertiliser Plant, and Subsea Gas Pipeline, on a tour.
He noted the benefits of refining crude oil in Nigeria, highlighting the erasure of “costs associated with either demurrage from import” and with the freight.
He said, “Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira.
“That is the element where foreign exchange is saved for the country becomes very clear. We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with the freight will be totally eliminated.
“This will make the price of our petroleum products cheaper in naira. If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.
“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency.”
Noting with more optimism, he said that “I am saying that by this time next year, our cost of import of petroleum products for petrochemicals or fertiliser will be able to save that which will save Nigeria’s reserve.
“It will help us so that we can begin to focus on more important items that we cannot produce in Nigeria today.”
Construction of the Dangote Refinery began in 2013 and was scheduled for completion in 2020 but due to disruptions brought on by the pandemic, completion of the project was shifted to 2021.
Upon completion, the refinery will become a 650,000-barrels-per-day refinery, located 60 kilometres east of Lagos, in the Lekki Free Zone area.
The refinery is owned by the Dangote Group, helmed by Africa’s richest Aliko Dangote.
Once operations start, the refinery and petrochemical project is projected to generate 9,500 direct and 25,000 indirect jobs.