Opinion: Massive Dangote refinery in Lagos commissioned

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Figures about the refinery 

Cost of the refinery was $19bn.

Construction took 7 years.

Capacity is 650,000 barrels per day of refined oil.

Nigeria consumes 33mn litres of petroleum every day.

Nigeria is reported to have spent $23.5bn in the year 2022 on imports of petroleum and diesel.

Aliko Dangote came to Lagos about 45 years.

What is the significance of the Dangote oil refinery? 

With the capacity of refining 650,000 barrels per day it means that that singular refinery will be able to refine and meet Nigeria's daily petroleum needs and still have more for export.

It must be noted that not all the crude oil that goes for processing in a refinery ends up to be petrol or diesel. There are several by products that come out of that refining process including, jet fuel, petrol, diesel, kerosene, gas, butimen, tar among others.

So, let us assume that only 50% of the processed crude oil would result in petroleum products and the rest in other outputs.

The 650,000 barrels is equivalent to 103mn liters. So the 50% of this capacity means that the Dangote refinery will produce 51mn liters of petroleum products. This means that with Nigeria's daily consumption of 33mn liters will be comfortably be met with ease.

So, with the Dangote refinery, Nigeria's domestic consumption will be catered for while the balance of 20mn litres will be available for export.

This is a drastic change from what Nigeria has been doing with it's oil endowment. Although Nigeria is the Africa's largest producer of crude oil, ironically it has been for decades been the largest net importer of petroleum products. This is so because, whatever is produced in Nigeria is exported as crude oil and in turn the country imports from Netherlands and other sources already refined oil.

This is the economic irony that the Dangote refinery is seeking to reverse.

That is not all, the Dangote refinery as mentioned above will be outing several other byproducts of crude oil refining. It is reported that out of the heavy oils produced from refining process at the Dangote refinery, they will be able to fire the geothermal generators which will generate 450MW of electricity daily. This is some of the electricity which will be used to run the operations of the refinery while the rest will be put on the main national grid.

Similarly, because of the enormous by-products that come from the refining process, Dangote is establishing a fertiliser plant which will utilise those by-products to produce the desperately needed fertilisers to enhance the agricultural aspirations of Nigeria.

This is not a mean achievement for Nigeria. In essence, Mr. Alike Dangote is destroying the ongoing myth about the Russian and Ukrainian fertilisers.

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