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Dangote Refinery announced that Nigeria will stop importing petrol by next month due to the refinery’s production capabilities.
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The refinery’s operations could reduce Nigeria’s annual fuel import bill by N6.2 trillion, saving significant foreign exchange expenditures.
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The refinery will meet the fuel needs of West Africa and beyond, including supplying aviation fuel to the continent and exporting to Brazil and Mexico.
EKO HOT BLOG reports that the Federal Government stands to significantly reduce its annual fuel import bill of approximately N6.2 trillion if the Dangote Petroleum Refinery starts selling premium motor spirit (PMS) as planned.
Aliko Dangote, Chairman of the Dangote Group, assured at the Africa CEO Forum Annual Summit in Kigali, Rwanda, that Nigeria would no longer need to import petrol starting next month.
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Following the removal of fuel subsidies by President Bola Tinubu on May 29 last year, Nigeria’s petrol imports were cut to an average of one billion litres monthly, according to the National Bureau of Statistics. Dangote announced that the $20 billion refinery is capable of meeting not just Nigeria’s, but West Africa’s petrol and diesel needs, as well as the continent’s aviation fuel demand.
“Right now, Nigeria has no cause to import anything apart from gasoline, and by sometime in June, within the next four or five weeks, Nigeria shouldn’t import even a litre of gasoline,” Dangote stated.
He added that the refinery has sufficient capacity to supply the entire West Africa with gasoline and diesel, and aviation fuel for the whole continent, including exports to Brazil and Mexico.
With an average pump price of N670 per litre and an average landing cost of N520 per litre, Nigeria’s monthly expenditure on petrol imports currently stands at approximately N520 billion, which totals N6.2 trillion annually.
The anticipated June supply from Dangote’s refinery is expected to save substantial amounts by eliminating shipping and other importation charges.
Industry experts noted that the difference between the landing cost and the pump price of PMS, currently N150 per litre, includes various logistical costs such as marine charges and Nigerian Ports Authority fees.
The Dangote Refinery’s domestic production will likely eliminate these costs, strengthening the naira and reducing the country’s foreign exchange expenditures.
In foreign currency terms, Nigeria spends around $4.16 billion annually on PMS imports, based on a conversion rate of N1,520 per dollar. However, some estimates suggest the actual expenditure could be higher.
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Analysts believe that at least one-third of Nigeria’s annual foreign exchange is spent on importing fuel. The commencement of local PMS production by the Dangote Refinery is expected to significantly bolster the nation’s economy and reduce its reliance on imported fuel.
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