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Dangote’s remark that ‘We would sell products at import price’ a wakeup call—Experts

More development economists have continued to review the meaning of the recent comments by the Group Executive Director, Strategy, Capital Projects and Portfolio Development, Mr Devakumar Edwin, during the first official visit by the new Minister of State for Petroleum Resources, Chief Timipre Sylva at the site of the Dangote Refinery in Lekki, Lagos State.

Edwin had in his remarks made it clear that “We are going to buy the crude just at the export price and will sell our products at the import price; the crude swap is operating only for the importers of the product.”

Many of the experts, who barred their minds on the comment, said the implications of the comments relative to the dreams of getting off the hook of fuel imports and subsidy crisis in Nigeria remains a high hanging fruit even though the new refinery will provide succor after all.

According to industry observers, part of the lead key advantage from the refinery may not go beyond cutting off international shipment cost considering the early signal that “We will sell our products at the import price”.

While encouraging other modular refineries contenders to push further and faster, pundits averred that the comment further made it open that the refinery remains a Nigerian firm designed to play big at the international petroleum products market from the Nigerian shores.

To further make his stand clearer, Edwin averred that the refinery plans to take advantage of local crude supply, but insisted that it won’t participate in the crude-for-fuel swap deal that is managed by the Nigerian National Petroleum Corporation (NNPC).

Besides, the 650,000bpd new refinery has been designed to process varieties of crude from sweet to light crude sourced both locally, and abroad.

Continuing, he said the asset creates market for 11billion per annum of Nigerian crude and can meet 100 per cent of the Nigerian requirement of all liquid products.

While agreeing that Nigeria is Africa’s largest crude oil producer, he regretted that it lacks refining capacity to meet its own fuel needs.

“The Dangote refinery, which is designed to maximise petrol output, will produce enough to allow for a small surplus of that fuel for export. It will also be able to send a large volume of diesel and jet fuel to international markets.”

According to him, “Dangote plans to export its diesel to Europe and gasoline to Latin America, Western and Central African markets.

He said that evacuation of refined products will be done by sea and through roads.

“We are thinking of investing in vessels. We want to make sure we are not held for ransom by any transport operators. Africa’s largest oil refinery had revealed that it would deliver its fuels to Nigerian consumers via roads and sea ports, and will effectively replace all of Nigeria’s fuel imports once fully operational.”

Dangote Timipre 2
Group President/Chief Executive, Dangote Industries Limited, Aliko Dangote addressing his guests during the refinery facility tour of the emerging Dangote Refinery in Lekki, Lagos State. Photo: Business Hilights

In his speech during an official visit to the Petrochemical complex located at the Lekki Free Trade Zone in Lagos, the Minister of State for Petroleum Resources, Chief Timipre Sylva, pledged support of the Federal Government towards ensuring the completion of the historic 650,000 BPD, Dangote Petroleum Refinery

The minister who was led on a tour of the Refinery by the Group President/Chief Executive, Dangote Industries Limited, Aliko Dangote, and the company’s Executive Director, Strategy, Capital Projects and Portfolio Development, Mr. Devakumar Edwin, was accompanied by the Chairman, Senate Committee on Petroleum Downstream, Senator Sabo Nakudu; Chairman, Senate Committee on Services/member, Senate Committee, Upstream, Senator Muhammad Musa; GMD, Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari; Director, Department of Petroleum Resources (DPR), Mr. Ahmed Shakur; Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Mr. Simbi Wabote; and the Executive Secretary, Petroleum Equalization Fund (PEF), Mr. Ahmed Boboi; among others.

He said “This is a very heartwarming moment for all of us as Nigerians. There is no way a project of this magnitude will be going on and government will not be interested. Anywhere in the world, if a citizen of a country has committed so much money into investing in this kind of massive project, government must show interest.

“I must say now that Dangote Group has turned this project to the story of all of us, we must all support this project to succeed, because the success of this project signals a lot. Of course, I am sure that the whole world is looking at the success of this project. Investors all over the world will look at the success of this project and will come to Nigeria to at least also enjoy the benefit of investing here. So, we are actually here to assure you, Dangote Group, that as a government, as NNPC, we will support this project as much as we can. You have definitely done very well.”

“As you can see, the whole team is complete, and whatever your concerns are, whatever your problems are, please feel free to let us know, so that we will together find a solution to problems that you might encounter. Because of course, in project of this magnitude, you cannot expect that you will not have problems.

Sylva said the Dangote Refinery and Petrochemical was a testament that the country possesses enabling environment for businesses to thrive and added that the success of the project will boost investors’ confidence in the country’s oil and gas project. He implored Nigerians to support the refinery project with a view to ensuring that it creates more value addition to the economy.