Aliko Dangote, president of the Dangote Group, has called on the Nigerian government to stop mortgaging crude oil, arguing that such practices impede the availability of feedstock for local refineries.
Speaking at a summit organised by the Crude Oil Refinery Owners Association of Nigeria in Lagos, Mr Dangote said: “To ensure sufficient feedstock availability we will need to stop mortgaging crude. It is unfortunate that while countries like Norway are putting oil proceeds into a future fund through their national wealth funds, in Africa, we are spending oil proceeds from the future today.”
His comments come in light of recent reports that the Nigerian National Petroleum Company Limited (NNPC) has pledged 272,500 barrels per day of crude oil through a series of crude-for-loan deals totalling $8.86bn (£7.03bn).
Mr Dangote, represented by Group Executive Director Mansur Ahmed, emphasised the need to prioritise domestic crude supply and expand production capacity. He revealed: “We built the Dangote refinery without a single incentive from the government. However, to achieve the vision of turning Nigeria into a refining hub for the region, investors need to be incentivised.”
The billionaire businessman highlighted global trends in refining, noting that 1.8 million barrels of new refining capacity is expected to come online in Kuwait, China, and Bahrain over the next three years. Conversely, he pointed out that several refineries in Europe and China, with a total capacity of 3.6 million barrels per day, are likely to shut down.
“It was recently in the news that Scotland’s only refinery will be shut down next year. Shell is converting the 7.5 million tonnes per annum refinery in Germany to a lubricating plant,” Mr Dangote said.
He added: “To grab this opportunity, we will need to build 1.5 million barrels per day of additional refining capacity. This would not be an easy feat, and strong support from the government and cooperation between stakeholders would be essential.”
In a related development, the Federal Government has designated the Dangote refinery as the exclusive supplier of jet fuel for Nigerian airline operators.
