It has been herculean since April when many Nigerians and motorists virtually slept at fuel stations in a persisting scarcity in a country that is world’s sixth largest oil producer.
Motorists, especially commercial drivers, spend the larger parts of their days in long and unending queues in few filling stations where petrol is dispensed while some rich people patronise black markets that have taken over roadsides in major cities.
Motorists who patronise black marketers pay at least 150 percent more than the pump price of N165 ($0.35 cent) per litre but unsure of the quality of the liquid served them by these roadside sellers.
Some motorists have reported their vehicles developing faults after using the adulterated petrol bought from these black market operators who have taken over the business from petrol stations.
Queues are not new in Nigeria but there had been respite in the last six years until April 2022 when the scarcity of the product had defied solution even though the new National Nigeria Petroleum Corporation (NNPC) had insisted of the availability and advised Nigerians against panic buying.
Although the retailers have adjusted their pump price from N165 ($0.35)per litre to N175 ($0.39) per litre, the product remains elusive despite Nigeria’s claims of massive importation.
Both major and independent marketers are conscious and fear that Nigerian government was planning to remove subsidy which had become a recurring agenda in the face of dwindling income which the federal government is giving as excuse to discontinue subsidy payment.
The government and many stakeholders believe that the removal of subsidy is ripe because the mega Dangote Petroleum Refinery which construction started in 2015 is almost ready for production and to supply petroleum products to Nigeria and other African countries.
Nigeria which started exploring and exploiting crude oil since 1956, remains largely an importer of petroleum products even as it exports an average of two million barrels crude oil daily.
Its four petroleum refineries in Warri, Port Harcourt and Kaduna had be moribund for decades, making the Africa’s most populous country dependent on import which consumes the larger chunk of the foreign exchange earnings from crude export.
Nigeria and Nigerians and some African countries have eyes on Dangote Petroleum Refinery which cost of construction has hit $19 billion from the initial $9 billion since 2015 when its construction started.
Situated in Lekki Free Zone near Lagos, the commercial nerve centre of Nigeria, the refinery is expected to be Africa’s biggest oil and the world’s biggest single-train facility upon completion in 2022.
Aside the astronomical increase in cost due to additional facilities, the refinery has also witnessed an increase in staff strength by 17,000 bringing the total number to 57,000 in the first quarter of 2022.
The petroleum refinery complex being built by 64-year-old Aliko Dangote, Africa’s richest business man, has 650,000 barrel capacity and will process a variety of light and medium grades of crude to produce Euro-V quality clean fuels including gasoline and diesel as well as jet fuel and polypropylene.
It will produce of 50 million litres of petrol daily; and yearly production of 10.4 million tonnes of gasoline, 4.6 million tonnes of diesel, and 4 million tons of jet fuel a year.
It will also produce 0.69 million tonnes of polypropylene, 0.24 million tonnes of propane, 32,000 tonnes of Sulphur, and 0.5 million tonnes of carbon black feed.
The President of Dangote Group, Mr Aliko Dangote, on May 29, 2022, assured that production would start before the end of 2022 and that the facility would help Nigeria to tackle the lingering issue of petroleum products’ importation and scarcity as well as expose Nigeria’s midstream and downstream sectors to the international markets.
Dangote who spoke at the 2022 Nigerian Content Midstream and Downstream Oil and Gas Summit in Lagos, described the refinery as an investment that would transform the economies of countries in sub-Saharan Africa.
“It makes me feel terrible to see a country as big and resourceful as Nigeria with high population, importing all its petroleum products, so, we decided it is time to tackle this challenge.
“It is not government’s responsibility alone to address the challenge of petroleum products’ importation in Nigeria. No, we have to collaborate with the government to tackle the issue of petroleum importation.’’
Dangote emphasised the need for the country to shift attention from crude oil export and diversify the economy.
“We should not as a country, be comfortable with generating revenue from crude oil export alone, because tomorrow, people may not need crude oil.
“If we do not move from crude oil to something else, we will have issues as a country. This is one of the things that I took upon myself to help address,” he said.
The refinery will be able to supply all the gasoline, diesel and aviation fuel used in the West African country and a third of its output will still be available for export, Dangote said.
Also, Mr Devakumar Edwin, the Group Executive Director of Dangote Industires, confirmed the $19 billion cost of the firm when completed and that the petrochemical project houses the world’s biggest ammonia plant, which had started producing fertiliser.
He said the state-owned Nigeria National Petroleum Company (NNPC), a facilitator of exploration and exploitation of oil and gas, has acquired 20 percent stake in the refinery that is worth $2.7 billion.
The Managing Director of NNPC, Mr Mele Kyari, in July 2022 confirmed that the corporation had paid an initial amount of $1 billion for the ordinary shares it acquired in the refinery
Kyari said the investment in the refinery will guarantee energy security for Nigeria.
With Dangote Refinery in place, coupled with planned completion of the rehabilitation of the moribund Port Harcourt, Warri and Kaduna refineries by the end of 2023, Nigeria would become a hub of petroleum products in Africa.
He explained that the rehabilitation of the state-owned refineries in Kaduna, Warri and Port Harcourt was ongoing, saying: “We have been trying to fix our refineries. We have awarded the contracts.’’
“We as a national oil company, has the responsibility to ensure energy security for this country and the meaning of this is that you must secure the supply sources.
“That means with the NNPC’s refineries in place and Dangote Refineries operating along with other initiatives that we are making, we are going to have a massive hub of petroleum production in West Africa.
“This will change the flow of product supply in the whole globe and scarcity will be history in Nigeria,” he assured.
Restive Nigerians are eager to seen the fruition of these projects that have been designed to halt the suffering of the nation, especially motorists, households and the aviation sector as well as the available foreign exchange.
Aviation minister Hadi Sirika on August 2, 2022 assured Nigerians that the Dangote refinery and other state owned refineries under rehabilitation will help end the scarcity of petrol and aviation fuel.
“By the grace of God, perhaps once the Dangote refinery is on line or if the government fixes its refinery — which is now ongoing — we will begin to refine this product and sell it.”
Minister of State for Petroleum, Mr Timipre Sylva, also confirmed the Turnaround Maintenance (TAM) of the state refineries to ensure local refining of petroleum products, in addition to the acquisition of stakes in the Dangote refinery.
A statement by Mr Horatius Egua, Senior Adviser, Media & Communications, to the Minister on August 3, 2022, said: “Nigerians have grappled with fuel scarcity for long. Let me once again appeal to Nigerians to be patient with government in finding lasting solutions to the crisis.
“Let us as Nigerians stand shoulder to shoulder in our shared quest for a greater country.”
A human rights activist, Mr Adeleye Osunde, sees the new order in the petroleum industry as a relief but warned that the local production should not translate to additional burden to consumers.
“The locally produced petroleum products should be within the reach of every Nigerians. The sale of crude to these refineries should not be denominated in dollars, because the crude oil is taken from Nigerian soil and Nigerians should reap the benefits,’’ he said.
Mr Yusuf Ahmed, a commercial motorist, doubts if the scarcity of petrol will be over even with the coming to stream of Dangote refinery and other refineries.
“I fear that Nigeria will come up with other excuses to deny is citizens of the comfort of their God given natural resources.’’
Aside the problem of importation and shortage of foreign exchange needed to pay for the order, he said that the activities of unions and operators in the petroleum chain should be checked.
Many of the unions, especially transporters of petroleum products, are a big pain in the process, explaining: “They go on strike at will and I hope that now that petrol sector has been deregulated and in private hands, these extraneous factors will be checked.’’
The petroleum distribution chain should be simplified and short, Mr Aliyu Ahmed, a logistic officer of the National Association of Petroleum Product Marketers, advised.
“If this is not streamlined and made short, I fear that the supply bottlenecks and scarcity will persist,’’ he warned.
However, Information and Culture minister Lai Mohammed on August 4, 2022 described the refinery as a game changer in Nigeria’s energy challenge once it comes on stream.
The minister who led a team of journalists on inspection tour of the refinery said the facility will engender huge value addition that would contribute to the increase in Gross Domestic Product (GDP)
“It will conserve foreign exchange by putting an end to importation of petroleum products and huge sum paid for subsidy and in addition, create employment and generate foreign exchange through export of finished products.’’