In a significant development for Nigeria’s energy sector, Aliko Dangote, President of the Dangote Group, announced a 600 million liter expansion of the dangote refinery storage capacity.
This will bring the total storage capacity to 5.3 billion liters, positioning the Dangote Petrochemical Refinery as a potential strategic reserve for refined petroleum products in the country.
Prior to the expansion, the Dangote refinery boasted a storage capacity of 4.78 billion liters. Dangote emphasized the importance of this strategic reserve, stating, “The country doesn’t have strategic reserves in terms of petrol, which is very dangerous. But in our plant now, when you came, we had only 4.78 billion liters of various tankage capacity. But right now we’re adding another 600 million.”
This expansion will bolster national security by providing a buffer against potential disruptions in the global oil market. The additional storage will allow Nigeria to maintain a stockpile of refined products, ensuring a more stable supply for domestic consumption.
Impact on Fuel Prices
While Dangote remained non-committal on a direct reduction in petrol prices, which currently hover around ₦700 per liter, he offered a promising example of the impact his refinery can have on fuel costs. When his refinery entered the market with diesel, the price dropped dramatically, from N1,700 to ₦1,200 per liter. This represents a significant decrease of over 60%.
“The issue of gasoline is certainly a different issue,” Dangote acknowledged. “That one is being dealt with by the government.”
However, he emphasized the positive impact on diesel prices, stating, “Let me give you an example. In the diesel, which the industries, transporters and everybody consume; when we first started, it was ₦1,700, and the dollar conversion was about ₦1,200 then. Immediately when we started, within two weeks we brought down the price to ₦1,000.”
While the impact on petrol prices remains to be seen, the dramatic reduction in diesel prices offers a glimpse of hope for Nigerian consumers. Increased domestic refining capacity, as evidenced by the Dangote refinery, has the potential to create a more competitive market and drive down prices.
Dirty Fuel Imports
Dangote also addressed the issue of dirty fuel imports, arguing that these fuels have detrimental effects on public health and the environment. He urged the Nigerian government to implement stricter regulations to prevent the import of such fuels.
“It is high sulfur, very polluting and also when you look at it, especially in Nigeria, in the past few years, we’ve been having cases of cancer, and most of these cases of cancer have to do with the bad fuel that we’ve been using,” Dangote stated.
He further highlighted the irony of Nigeria exporting premium crude oil while importing low-quality fuels. This call to action emphasizes the need for stricter regulations and quality control measures to protect Nigerian citizens from the health hazards associated with dirty fuel.
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Looking Ahead
The Dangote refinery’s expansion and focus on cleaner fuel production represent significant steps towards a more secure and sustainable energy future for Nigeria. The increased storage capacity provides a vital buffer against external disruptions, while the potential for lower fuel prices offers a welcome relief for Nigerian consumers. Additionally, by advocating for stricter regulations on fuel imports, Dangote highlights the importance of public health and environmental protection.
