The Dangote Refinery, a $20 billion project spearheaded by billionaire Aliko Dangote, has officially begun production of Premium Motor Spirit (PMS) otherwise known as petrol, marking a significant milestone in Nigeria’s energy sector.
The 650,000 barrels per day refinery located in Lagos begins production today, Tuesday, September 3, 2024, over a year of its launch in May 2023.
This development is expected to alleviate the ongoing petrol scarcity that has gripped the nation, offering much-needed relief to millions of Nigerians.
“This refinery will fuel growth, development, and prosperity by supplying energy to our people,” said Aliko Dangote, President of the Dangote Group, during a press briefing on Wednesday.
Dangote expressed gratitude to President Bola Tinubu’s administration for fostering an environment conducive to the success of the initiative.
“I salute the people of Nigeria and President Bola Tinubu’s government for creating the conditions that allowed us to achieve this monumental task. This refinery will drive growth, development, and prosperity by providing energy to our people,” Dangote stated.
He also praised Tinubu for the “Naira for crude, Naira for product” initiative, which he believes will stabilise the Naira by reducing the demand for dollars by 40%.
“As we have this refinery working, it will show the true consumption of Nigeria; we can track every loaded truck and ship,” he said.
He added that the refinery is designed to meet the demands of not only Nigerians but also those in sub-Saharan Africa.
Last December, Dangote, Africa’s leading industrialist, commenced operations at his $20bn facility sited in Lagos with 350,000 barrels a day.
The refinery, which was initially bogged by regulatory battles, hopes to achieve its full capacity of 650,000 barrels per day by the end of the year.
The refinery has begun the supply of diesel and aviation fuel to marketers in the country and now petrol.
The rollout of petrol by the Dangote Refinery followed the admission by the NNPCL that it owes “significant debt to petrol suppliers” and this poses a threat to the sustainability of fuel supply.
There have been reports that a $6 billion debt the NNPCL owes petrol suppliers has worsened petrol scarcity in Nigeria, a perennial feature since the beginning of 2024.
At different times, the NNPCL blamed logistics challenges, and flooding, amongst others for the supply shortages of the essential commodity.
However, in a statement on Sunday, NNPCL spokesman Olufemi Soneye said “this financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply”.
Nigeria, Africa’s most populous nation, faces energy challenges, with all its state-owned refineries non-operational. The country is heavily reliant on imported refined petroleum products, with the state-run NNPC being the major importer of the essential commodities.
Fuel queues are commonplace in the country. Prices of petrol tripled since the removal of subsidy in May 2023, from around ₦200/litre to about ₦800/litre, compounding the woes of the citizens who power their vehicles, and generating sets with petrol, no thanks to decades-long epileptic electricity supply.
The government simultaneously unified forex windows, with the value of the naira nosediving terribly from $1/₦700 to over $1/₦1600 at the parallel market. Prices of food and basic commodities immediately climbed through the roof as Nigerians battled attendant inflation.