Dangote refinery’ll drop fuel imports by 450,000bpd, boost export by 200,000bpd—IMF
…Silent on moribund national refineries upon repairs by NNPC
The International Monetary Fund (IMF) have joined the Federal Government in praising and explaining the expected contributions of the emerging Dangote Refinery in Lagos, saying the 650,000 bpd capacity would translate into reduced imports of refined products by 450,000 bpd and increasing exports of refined products by 200,000 bpd.
This is based on the statistics that the privately-operated Dangote refinery could meet all domestic demand for liquid products and still have sufficient surplus for exports.
In a new oil and gas assessment report released by the Fund, it noted that takeoff of the refinery will mean instant drop of Nigeria’s net exports of crude oil to refined oil by 650,000 bpd .
However, the report failed to envisage chances of Dangote refinery importing crude outside Nigeria even through there is no regulation stopping a private refinery from importing crude oil from anywhere in the world.
The IMF report further added that Dangote refinery has all it takes to transform the country’s petroleum industry, boost growth, turn the country into an exporter of refined products, improve the balance of payments, and transform regional trade patterns to the tune of about $2bn yearly trade balance.
It said “With a crude oil production of almost two million barrels per day, Nigeria is Africa’s biggest oil producer and one of the largest oil exporters globally. Yet, only a small fraction of Nigeria’s crude oil production is refined domestically —on average only about 0.08 mbpd have been delivered to local refineries between 2008 and 2017, just a fraction of the theoretical refining capacity of 0.445 mbpd (broadly covering domestic demand) including due to under-investment into the refinery.
“This leaves a substantial opportunity for value added to meet domestic demand for petrol, kerosene, jet fuel, and diesel, and thus to reduce the import bill while diversifying exports. A new oil refinery constructed by the Dangote Group in Lagos State promises to double Nigeria’s refining capacity and boost activities in the downstream sector.”
IMF also agreed that “Under the currently envisaged mix of refined products, this would boost the country’s growth by 0.3 to 0.4 percentage points in 2022, and improve the trade balance by $2bn per year (net after reducing both net crude exports and refined oil imports).
“These benefits could materialise as soon as 2020, the current target year to make the refinery operational, but are included from 2022 onwards in staff estimates, thus providing upside potential to current projections.
“Additional economic benefits could be significant. At the current construction stage, the refinery is directly or indirectly employing over 180,000 people, including on-site contractors. Once operational, additional job opportunities would materialise, through indirect employment through retail outlets, filling stations, and in transport,” IMF report averred.
