New Timeline Emerges for Dangote Refinery to Reach Full Operation
- A new report by S&P Global has indicated that Dangote Refinery capacity will reach its full capacity by the middle of 2025
- The report noted that the refinery's partial commencement is critical to the country's economic growth
- It stated that when the refinery begins full operations, it will break the country's dependence on the cycle of importation
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
S&P Global has estimated that the Dangote oil refinery may not reach a full complement of its operations until somewhere around the middle of 2025.
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This contradicted earlier projections that the Dangote Refinery may start producing at full capacity of 650,000 barrels per day by the second quarter of 2024.
In an update on Nigeria, the new report stated that the recent partial commencement of operations was critical to the growth of the Nigerian economy.
Legit.ng had reported that the refinery announced it was ready to commence production of refined petroleum products after receiving the sixth consignment of one million barrels of crude needed for the facility's initial operations.
Towards a journey to reduce foreign dependence
According to the global firm that provides financial market research and intelligence, the introduction of the Dangote Refinery in Lagos can help Nigeria fulfil its potential by reducing a debilitating dependence on foreign refineries.
The report said despite being the largest oil producer in Africa, Nigeria is compelled to export nearly all of its crude oil because state-owned refineries are closed for maintenance.
When the 650,000 bpd Dangote Refinery starts operating fully, it noted that is expected to contribute to breaking Nigeria's dependence on the cycle of importing fuel and exporting crude oil.
According to S&P, the Dangote crude distillation unit, which is optimised for Nigerian crude grades and built to handle 12 crudes at once, is what makes the plant even more advanced.
S&P Global stated:
“While Aliko Dangote celebrated these deliveries in public statements, S&P Global analysts do not expect that the refinery will reach full operating capacity until mid-2025, with further delays still possible,”
Inflation to average 24.3%
According to the report, the recent Nigerian economic data points to continued headwinds for the private sector.
It also stated that a renewed downturn in the fourth quarter of 2023 halted a recovery period following the cash crisis at the start of the year.
It added:
“Demand is waning, and a survey of firms in June 2023 attributed higher prices to fuel costs. Reports of higher fuel prices remained well above average levels into the final quarter of 2023. S&P Global Market Intelligence forecasts that consumer price inflation in Nigeria will average 24.3 percent in 2023 and remain elevated at 18.5 percent in 2024.
“Perhaps the introduction of the Dangote refinery in Lagos can help Nigeria fulfill its potential by reducing a debilitating dependence on foreign refineries,”
FG gives oil firms in Nigeria orders
Legit.ng reported that the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) ordered oil companies in Nigeria to supply about 483,000 barrels of crude oil daily to local refineries for the next six months beginning January 2024.
The initiative is part of Nigeria's efforts to ensure regular supply to local refiners for domestic consumption.
About six local refineries are expected to begin production in the coming year, including the 650,000-capacity Dangote refinery and Nigeria's three refineries in Port Harcourt, Warri, and Kaduna.
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Source: Legit.ng
