In an effort to meet the nation’s fuel needs, the federal government is getting ready to send 12 million barrels of crude oil to the Dangote Refinery starting next month.
The CEO of Dangote Refinery, Aliko Dangote, confirmed this situation in a U.S. interview with Bloomberg TV.
According to Dangote, an ongoing deal with the federal government allows the refinery to process crude locally and manufacture petrol, diesel, and jet fuel for the domestic market. This agreement includes the delivery of crude oil.
He clarified that this arrangement is a part of the strategic relationship between the Nigerian government and the Dangote Group, known as “Crude Oil for Naira.”
“With the federal government, we are striving for a strong deal that guarantees the nation’s energy security. This means no more fuel lines,” Dangote explained.
“The government has promised to supply us with crude oil; in October, 12 million barrels, or about 390,000 barrels per day, will be delivered. For the local market, we will refine this crude to create aviation fuel, diesel, and petrol. Any surplus will be exported.”
This quantity of crude oil is anticipated to alter Nigeria’s fuel distribution system fundamentally. Dangote stated that it will significantly increase fuel accessibility throughout the nation by assisting in reopening 50–60% of the filling stations that are now out of commission.
Furthermore, the project will eliminate the necessity of using ships for the expensive and time-consuming long-distance transportation of petroleum. Dangote emphasized that Nigeria could save roughly $1 billion in demurrage fees—amounts paid for delays in unloading cargo ships—if these shipping costs were reduced.
“The deal with the government ensures that we sell the refined products to all marketers, which will mean the reopening of 50 percent to 60 percent of our petrol stations that have been idle. Additionally, this will lower the expenses associated with ships cruising off the coastlines of Lome and other locations. We expect to save more than $1 billion in demurrage alone,” Dangote noted.
