Dangote Group Expands Refinery Storage Capacity Amid Challenges

The Dangote Group, led by President Alhaji Aliko Dangote, has announced an expansion of its refinery’s storage capacity by 600 million litres. This development will increase the total storage capacity of the Dangote Petrochemical Refinery to 5.3 billion litres from the current 4.78 billion litres. The expansion is a strategic move to enhance the refinery’s role as a key reserve for refined petroleum products in Nigeria.

Speaking at the Afreximbank Annual Meetings and AfriCaribbean Trade & Investment Forum in Nassau, The Bahamas, Dangote highlighted the hurdles his refinery faced, including resistance from international oil companies reluctant to sell crude oil to his facility. He suggested that these companies doubted his ability to succeed with the 650,000 barrels per day capacity refinery.

Dangote did not commit to whether his refinery would reduce the current petrol pump price of around N700 per litre. However, he shared a success story of how the price of diesel fell significantly after his diesel entered the market. “The issue of gasoline is certainly a different issue. That one is being dealt with by the government,” he said. He recalled that diesel prices dropped from N1,700 to N1,200 shortly after his refinery’s diesel production commenced.

Dangote emphasized the importance of having strategic reserves for petroleum products, noting that Nigeria currently lacks such reserves. “In our plant now, when you came, we had only 4.78 billion litres of various tankage capacity. But right now we’re adding another 600 million. So effectively, as we go forward, the refinery will be the strategic reserve of the country in terms of petroleum products,” he stated.

He also touched on the challenges of obtaining crude oil, mentioning that his refinery had to import crude from the United States due to non-cooperation from some international oil companies. Dangote attributed this to the entrenched interests of those benefiting from the existing system.

Furthermore, Dangote raised concerns about the importation of dirty fuels into Nigeria, linking it to increased cancer rates. He urged the Federal Government to enforce regulations against the importation of such fuels. “In the past few years, we’ve been having cases of cancer, and most of these cases of cancer have to do with the bad fuel that we’ve been using,” he explained.

Dangote expressed optimism about Nigeria’s fuel importation scenario, stating that the country would cease importing fuel once his refinery begins selling Premium Motor Spirit (PMS) in the coming weeks. He also revealed plans to supply cheaper fuel to the Caribbean and to establish a terminal in the region to provide more affordable energy.

In a related anecdote, Dangote recounted how he once defied advice from Khalid Al-Falih, a former Saudi Arabian Minister of Energy, who suggested that he abandon the idea of building the refinery. Dangote asserted his confidence in his vision, rejecting the minister’s counsel.

The expansion of Dangote’s refinery capacity and his strategic initiatives are poised to significantly impact Nigeria’s petroleum industry, promising more stability in fuel supply and potentially lowering costs in the long term.

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