Emmanuel Aku
Local production will therefore massively cut the countrys import bill.
According to the Central Bank of Nigeria, the cost (including freight) of petroleum products imports into Nigeria doubled over a fiveyear period from about US8.4 billion in 2017 to US16.2 billion (indicating an annual average of US11.1 billion), before rising further to US23.3 billion by end2022.
The central bank says the average annual cost of petroleum products imports to Nigeria could reach US30 billion by 2027 if the country continues to rely on petroleum imports.
This money can now potentially be saved with Dangote refinery plugging the supply shortfall.
In my previous research, I have found that there is a link between Nigerias crude oil export dependency and its weak local refining capacity.
This is also the case with Mexico, which exports its crude abroad for processing.
Based on my experience in the sector, I set out the four areas where the Dangote refinery is expected to make an impact on Nigerias petroleum sector and, by extension, the Nigerian economy.
Aliko Dangote
By Nnaemeka Vincent Emodi, research fellow, The University of Queensland
Nigerias new Dangote petroleum refinery is Africas biggest it will produce 650,000 barrels a day, giving it the potential to address the countrys energy supply crisis.
Keypoints
- Related articles
- Reduced oil import dependence
- Support for allied industries
- Possible increase in carbon footprint
- Conclusion