More than a year after its launch in May 2023, the Dangote Refinery on Tuesday produced its first batch of Premium Motor Spirit (PMS), commonly known as petrol, from its 650,000 barrels-per-day facility.
At a press conference, Aliko Dangote, the billionaire businessman and owner of the Lagos-based refinery, described the occasion as “a day of celebration” for Nigerians.
He assured all citizens that they “are now going to have good petrol while the engines of your vehicles will last longer. You will not be having an engine issue, which a lot of us were having. It won’t happen at all.”
“The quality here will match that of anywhere in the world; US, America, we will make sure that nobody will beat us in terms of quality,” Dangote said.
‘We’ll Save Forex’
The refinery owner said as soon as his company finalises modalities with the Nigerian National Petroleum Company Limited (NNPCL), the product will hit the market.
“As soon as we finalise with the NNPCL, our product will start going into the market.
“We will help to restore industry and manufacturing. We will begin real import substitution, which is what we have, you know, saving foreign exchange, earning foreign exchange, which will stabilise the naira, and it will also help bring down inflation and cost of living,” he stated.
Last December, Dangote, Africa’s leading industrialist, commenced operations at his $20bn facility sited in Lagos with 350,000 barrels a day.
The refinery, which was initially bogged by regulatory battles, hopes to achieve its full capacity of 650,000 barrels per day by the end of the year.
The refinery has begun the supply of diesel and aviation fuel to marketers in the country and now petrol.
NNPCL Debt Challenge
The rollout of petrol by the Dangote Refinery followed the admission by the NNPCL that it owes “significant debt to petrol suppliers” and this poses a threat to the sustainability of fuel supply.
There have been reports that a $6 billion debt the NNPCL owes petrol suppliers has worsened petrol scarcity in Nigeria, a perennial feature since the beginning of 2024.
At different times, the NNPCL blamed logistics challenges, and flooding, amongst others for the supply shortages of the essential commodity.
However, in a statement on Sunday, NNPCL spokesman Olufemi Soneye said “this financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply”.
Nigeria, Africa’s most populous nation, faces energy challenges, with all its state-owned refineries non-operational. The country is heavily reliant on imported refined petroleum products, with the state-run NNPC being the major importer of the essential commodities.
Fuel queues are commonplace in the country. Prices of petrol tripled since the removal of subsidy in May 2023, from around ₦200/litre to about ₦800/litre, compounding the woes of the citizens who power their vehicles, and generating sets with petrol, no thanks to decades-long epileptic electricity supply.
The government simultaneously unified forex windows, with the value of the naira nosediving terribly from $1/₦700 to over $1/₦1600 at the parallel market. Prices of food and basic commodities immediately climbed through the roof as Nigerians battled attendant inflation.