We’ve Sufficient Fuel Reserves For Nigerians, Dangote Refinery Confirms

Alhaji Aliko Dangote, the president of the Dangote Group, disclosed that the Dangote Petroleum Refinery’s reservoir currently holds more than 500 million liters of gasoline.

He also said the refinery now produces enough fuel for local consumption and export. Dangote spoke during a tour of the $20bn Lekki-based facility with the Zambia Minister for Energy, Makozo Chikote, on Saturday.

The Zambian official visited the Dangote refinery in Lekki, Lagos State, seeking collaboration with the founder to help solve the country’s energy security issue.

In his address during the tour, Dangote said the refinery currently has N600bn worth of stocks in its tank farm. He said the plant will reach its 650,000 barrels per day full production capacity next month, adding that Nigeria cannot consume up to 50 percent of its refined products.

“We can satisfy more than the local needs of Nigeria. As we speak, we have more than half a billion liters (of petrol). We have more than N600bn worth of stocks here today in the refinery. We have more than enough. The refinery is producing enough refined products, like gasoline, diesel, and kerosene, to meet 100 percent of Nigeria’s requirements,” he stated.

Dangote disclosed that arrangements were being made to get enough crude to aid the refinery’s ramp-up plans.

“Now we are ramping up production. We must be at our full capacity by next month. But we have to do quite a lot of arrangements in terms of crude supply,” he stated.

Speaking about fuel quality, Africa’s richest man disclosed that refineries across the world are shutting down because of the Dangote refinery. He said no refinery in Africa and across Europe can produce the kind of quality fuel his refinery produces.

He said the sulfur content of his fuel could be as low as zero parts per million, while the octane number can be 95.

“In terms of quality, there is actually no refinery in Africa, even in Europe, that can produce our type of quality. We want to be flexible; you know the laws keep changing.”

Today, they will say 150 parts per million; tomorrow it’s 50 ppm, but we can produce up to zero ppm. This means we can do winter diesel; we can do Euro-5. No refinery around here can do that. When you read the news, you see that a lot of refineries now, especially in Europe, are shutting down because of our own refinery. Our refinery is a percentage of the world’s production.

“Obviously, if we pump a lot, some of them will not be able to sell; that’s why in some countries, they will offer them money to just keep dumping. But then, we have to weather that storm up to the time that we will be able to be on our feet,” he added.

Dangote maintained that the local fuel consumption in Nigeria is 40 percent of the refinery’s total production, stating that the remaining 60 percent is for export to other countries, especially Africa.

He revealed that arrangements were being made with Afreximbank to resolve the challenges of letters of credit and financing.

“The maximum local consumption is around 40 percent, but 60 percent will be exported. We are making a lot of arrangements with some banks to make sure most of the products are sold within Africa, so that it can be a real African refinery, not just for us to come and process raw materials and ship the products outside Africa. The problem has always been letters of credit; we are working with Afreximbank to resolve that financing issue,“ he said.

On the types of fuel being produced and the one the refinery has a competitive advantage on, he posited, “We have competitive advantages over PMS, diesel, aviation fuel, and others. The consumption of aviation fuel in Africa is very low because we don’t have too many aircraft flying around. PMS is what people use a lot. Here in Nigeria, most discussions are on PMS. You know we just deregulated, and everybody is trying to find his feet. Now that the subsidy is gone, things are ramping up.”

The Vice President of the Dangote Group, Davakumar Edwin, stated that the refinery has a strategic location advantage because it is close to the sea. He also reiterated that the refinery can meet all local requirements.

Analyzing the refinery’s production data during a presentation, he stressed that the facility can produce 104 million liters of different petroleum products per day.

“57 million liters of petrol every day, 20 million liters of jet fuel, and 37 million liters of diesel are our daily production. The local consumption is just 46 million liters. The rest, 58 million liters, will be exported on a daily basis,” Edwin explained.

In the presentation, it was disclosed that the refinery supplies 33 million liters of PMS for daily local consumption; diesel is 10 million liters per day and aviation fuel is 3 million liters. Data from the tank farm shows that the refinery has reservoirs to store fuel for days.

It has 12 tanks to store up to 600 million liters of petrol, which can serve the country for 18 days. It has 17 tanks for 408 million liters of aviation fuel for 136 days and 14 tanks to store 340 million liters of diesel for 34 days. Similarly, 20 tanks are in place for 2.4 billion liters of crude oil for 20 days.

In all, there are 177 tanks with a 4.742 billion-liter capacity. At the control room, it was learned that the refinery is currently at 550,000 barrels per day, which is about 85 percent of its full capacity.

Last week, the Nigerian Midstream and Downstream Petroleum Regulatory said local refineries could not produce up to 50 percent of Nigeria’s daily PMS consumption of about 50 million liters per day, stressing that this necessitated the importation of more PMS to cover the shortfall.

Zambia seeks support

During the visit, the Zambia Minister for Energy, Chikote, informed Dangote that the Zambian government is mandated to safeguard the supply of fuel.

According to him, the nation needs energy security, and the Dangote refinery will be important to make that happen.

The energy minister said the country is looking at Dangote as a company to come on board for competitive fuel pricing and to ensure sufficient, reliable, and affordable petroleum products for Zambia.

He explained that the country is creating an enabling environment for private participation in the energy sector.

He revealed that the country depends majorly on a facility in Dar es Salaam, Tanzania, for its fuel needs, saying other neighboring countries also depend on this same source.

“The first thing I want to say is that, as the Zambian government, we are mandated to safeguard the supply of our fuels; the security has to be given to the nation. At the same time, due to reforms, the government disengaged itself from participating in the procurement of this product, and we created an environment for private players to participate. Our policy formulation is to make sure that private players can participate in the energy sector. That is our goal.

“Currently, 100 percent of importation of our petroleum products is being done by the private sector. We are going through some challenges as a country. This is also arising from some of the points that you raised, climate change, and others. Zambia is not a landlocked country. We are land-linked.

“We depend on our good neighbors that surround us. This is why you see us depending on Dar es Salaam, Tanzania. Burundi is looking at the same facility. Malawi is looking at the same facility. The Democratic Republic of Congo is also looking towards the same facility. This results in too much congestion, delays, and all those challenges,” Chikote stated.

He pointed out that Zambia was hit by a drought, affecting power generation because the country was 85 percent dependent on hydropower generation.

“This seriously affected our economic growth. Our economic growth was shaken or is still being shaken, even though we are putting in a lot of mitigation measures to address the challenge. As a country, we are targeting increasing productivity in the minings. We are targeting to increase productivity in agriculture, but through what? It is through having a sufficient reliable energy sector to address these challenges. So, now, the reason why we find ourselves here is to start exploring opportunities that will start addressing the difficulties,” he told Dangote and his team.

He stated further, “We are trying to promote competition among our private players. We are looking at Dangote coming on board, which would lead to efficient, reliable, quality, and competitive products, and we want these done like yesterday. Coming to the Dangote Petroleum Refinery, we have learned so many advantages of bringing many players for competition, which has improved the lives of the citizens.”

The minister wants African countries to come together to find solutions to their problems.

“From what we have seen, we need to promote trade within Africa to promote each other. We need countries to come together to make Africa efficient and a reliable trade hub.

“We have seen here that we can learn from what Dangote has done, and this would lead Africa and Africans to stand on their feet and not depend on overseas support in terms of trade. I believe, going forward, that people have learned a few lessons. The one lesson I have learned from this visit is that Dangote looks at the bigger picture for Africa.”

Responding, Dangote stated that the refinery project, like other projects in the past, is not for Nigeria alone.

“This refinery is not only for Nigeria; it is for Africa. We must sustain the African Continental Free Trade Area deal. We are trying to see how we trade with other African countries,” he stated.