Giant Refinery to Solve Petroleum Problems in Nigeria
Giant Refinery to Solve Petroleum Problems in Nigeria – Nigeria is expected to get good news regarding the oil crisis in the country. It is quite ironical as Nigeria is one of the largest oil producers in Africa but the country has to provide huge fuel subsidy for Nigerians. The main reason is that the country is lack of oil refinement. In the end, the raw materials can only be exported to other countries for refining process and Nigeria’s government has to import the fuels with higher prices. High production rates in Nigeria then becomes useless and this brings serious issues for the country.
However, good news comes from Dangote Oil Refinery. It is said that it will be game-changer and will bring huge positive impact on the Nigeria’s economy so the fuel imports can be reduced and government should not shoulder huge burdens of fuel subsidy anymore. Dangote Group currently build giant refinery. The group is owned by Alika Dangote. He is known as Africa’s richest man. The refinery is worth $20 billion and it is expected to bring good news and game changer to Nigeria. The new refinery is expected to produce up to 53 million of gasoline every day. In addition, it will also produce diesel’s fuel up to 4 million liter every day. Even, the refinery is said to have capacity to produce up to 2 million liters of jet fuel every day. Thus, impact of the giant refinery is not only for the fuel used by publics, but also for the industries and even aviation.
The news regarding the giant refinery was announced by Dangote in an event. The event was attended by some heads of West African countries and industries. Dangote also said that the refinery will become largest single train refinery in the world. Nigeria’s lack of capacity in refining oils will be solved with the refinery. At least, exports and imports can be swift and changed to the refinery and there will be lower costs to get the refined fuels. Currently, Nigeria imports the fuels from India, UAE, Netherlands, and also Belgium. Even between 2015 and 2019, costs of the import for the refined petroleum products have reached $58.5 billion and the cost can be higher as the price of oil may keep increasing in the future.
Existence of Dangote’s giant refinery will surely become game changer. It will reduce the costs of importing the refilled fuels. In addition, it even opens possibility of exporting the refined petroleum products to other countries that will make Nigeria able to gain more incomes. The single train refinery is said to be able to process up to 650,000 barrels every day. That is why it is going to become largest single train refinery in the world. The refinery is built in Lekki Free Zone. It covers 16,500 free trade areas. The refinery area also includes airports, residential areas, commercial spots, and even start-up community. Thus, it will be integrated area. Based on the project and plan by Dangote, the area of refinery is going to seven times larger than the Lagos’ Victoria Island.
Nigerian government will not deny that the Dangote giant refinery will become game changer. It may not be officially operated but estimated capacity that can be handled by the refinery will surely bring positive impact on Nigerians. Moreover the new president of Nigeria, Tinubu has program to remove fuel subsidy in the country. In his inauguration day, he had made statement that the subsidy removal has gained supports from the government and it will be officially regulated in the end of June. Statement made by Tinubu and government surely brought huge response. Most Nigerians responded it negatively. The public is not ready with the removal of subsidy. For decades, Nigerians have enjoyed cheap price of fuels. Moreover, currently there is inflation and prices of basic needs get higher. When the subsidy is really removed, it will lead to higher price of fuel. It will surely have huge impact on Nigerians’ economy and most people may not be able to afford. Even, transportation costs can rise up to 200% that will make poverty hit Nigeria.
Protests are not only from Nigerians. Nigeria’s Labour Congress and some analysts also give negative responses on Tinubu’s decision to remove the fuel subsidy. Some analysts confirm that fuel subsidy surely need to be stopped and it is not good the sustainability of the country as huge burdens of budgeting make the government unable to allocate enough funds in other sectors. However, removing the subsidy abruptly is said to be reckless decision. Government should at least prepare and provide long-term solutions for it. Tinubu in his speech only said that the subsidy will be allocated to the healthcare, education, jobs, and infrastructure but there is still no realistic solution to mitigate and solve the issues. Even, it is calculated that the price of fuels will be three times higher with the removal of subsidy. With this condition, people will not be ready with the upcoming situation. Thus, the emergence of giant refinery can be solution but it still needs time to start the production and refining process.Tags: Giant Refinery, Nigeria