THE Dangote Petroleum Refinery’s admission that it missed its August target date to commence production because it could not get crude oil from the Nigerian National Petroleum Corporation Limited reflects how Nigeria’s oil industry is being grossly mismanaged. In an interview with S&P Global Commodity Insights, an Executive Director of the Dangote Group, Devakumar Edwin, explained that it was already importing crude and would begin refining between October and November. This is another national embarrassment. Beyond its lame excuses, the NNPC must ensure that local refineries receive adequate crude supplies.
It baffles Nigerians and the rest of the world how successive administrations since 1999 entrench the country’s continued dependence on imported refined petroleum products despite being a major producer and exporter of crude. The NNPC which owns and has run aground four refineries relishes this iniquitous role despite its devastating impact on the country.
All hopes of Nigeria ending decades of prohibitive fuel imports pinned on the 650,000 barrels-per-day Dangote refinery located in Lagos now appear misplaced. Edwin said the refinery would process crude imported from Angola! More worrisome, the company will reportedly initially concentrate on diesel, and lubricants, ignoring petrol, whose prices have spiked and created further hardship for Nigerians.
At peak production, Nigeria is Africa’s largest crude producer. Relying on multiple sources, Yahoo Finance ranks her the world’s 15th top producer, and Angola 16th. Nigeria’s production currently hovers between 1.22 million barrels per day and 1.5 million bpd. It has an OPEC quota of 1.78mbpd and capacity for much higher.
NNPC has no defensible excuse not to supply the Dangote Refinery, all the established and upcoming modular refineries, as well as its own four comatose refineries in Port Harcourt (two), Warri, and Kaduna with combined capacity of 445,000 bpd. The government and the NNPC upturn the country’s comparative advantage and inflict misery on Nigerians.
Belatedly, NNPC, which owns a 20 per cent stake in the Dangote Refinery, says it will start supplying the facility crude in November.
It should immediately start supplying the modular refineries too. The Crude Oil Refinery-owners Association of Nigeria says that its member-companies are barely surviving because NNPC does not supply them crude, leaving their refineries idle.
