According to Punch, the Organisation of the Petroleum Exporting Countries (OPEC) has expressed optimism that Nigeria’s Dangote Petroleum Refinery will help stabilize fuel supply and reduce petrol prices as it moves toward full-scale operations.
In its latest Monthly Oil Market Report, OPEC highlighted Nigeria’s economic growth, which reached 3.5% year-on-year in the third quarter of 2024, attributing part of this progress to the refining sector.
The report emphasized that while the non-oil sector is growing, the oil industry remains crucial to the country’s economic stability.
The full operation of the Dangote Refinery is expected to enhance petroleum product availability, reduce reliance on imports, and potentially lower pump prices.
The $20 billion refinery, located in Lekki, Lagos State, is the world’s largest single-train refinery, with a production capacity of 650,000 barrels per day.
Since it began operations in January 2024, it has had a significant impact on Nigeria’s fuel market, notably reducing diesel prices from around N1,700 to N1,000 per liter. Recently, it also cut the ex-depot price of Premium Motor Spirit (PMS) from N950 to N890 per liter.
However, a major challenge facing the refinery is securing a steady supply of local crude oil. The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) disclosed that the facility needs about 550,000 barrels of crude per day.
Due to insufficient domestic supply, Dangote Refinery has resorted to importing crude oil, recently securing 12 million barrels from the United States.
Industry stakeholders, including the Crude Oil Refinery Owners Association of Nigeria (CORAN), share OPEC’s optimism.
They believe that if the refinery achieves full production, it could significantly lower fuel costs, reduce Nigeria’s dependence on imports, and strengthen the economy.
SOURCE: Usainancy