DANGOTE REFINERY WILL REDUCE AFRICA’S PETROLEUM IMPORTATION BY 36% – APPO

Plants located in Port Harcourt with an installed capacity of 210,000 bpd employed 487 new staff members in 2020. African Petroleum Producers Organisation (APPO) has said that the Dangote Oil Refinery being constructed in Lagos, would reduce petroleum products import across Africa by 36 percent upon commencement of operations.

The organisation also expressed the belief that the success of the Dangote Refinery project could incentivise the rise of similar projects across Africa despite the current focus on energy transition. Omar Farouk Ibrahim, the secretary-general of APPO, said in an interview that the Dangote Refinery shall be supplying over 12 percent of Africa’s products demand when it becomes operational.

“To appreciate the impact that the Dangote Refinery is going to have on African economies and especially on the supply of petroleum products, and to some extent the conservation of scarce foreign exchange, a look at some statistics on the continent’s petroleum products demand and supply is in order.

“Currently, Africa’s daily petroleum demand is 4.3 million barrels per day (mbd). Of this volume, 57percent is produced locally (on the continent) while 43 percent is imported. When Dangote Refinery is fully on stream, the percentage of Africa’s products import shall drop to 36 percent. This is even as the total volume of products demand rises to 5.4 mbd. You can, therefore, see the huge impact that the refinery shall be made on the overall product supply in Africa. Dangote shall be supplying over 12 percent of Africa’s products demand.

“That is huge savings for a continent that has scarce foreign exchange and little to export. We shall save from buying abroad and from shipping and insurance costs. Furthermore, the success of Dangote could incentivise the rise of similar projects, the noise about energy transition notwithstanding,” Ibrahim said. Ibrahim also hailed Dangote’s decision to go ahead with the construction of crude oil refinery despite a campaign against fossil fuels, adding that the demand for fossil fuel is going to continue for several decades to come.

“We believe that Dangote made a very wise decision to proceed with the project, despite the campaign against fossil fuels. There will be demand for petroleum products for many decades to come. Indeed, we see petroleum products prices rising steadily in the next few years for at least two decades”.

“This is because new refineries are not coming up in Europe and North America, where Africa imports 34 percent of its supplies because their governments have embraced energy transition, some willingly, others due to pressure. So, some of the sources of Africa’s imports are going to dry up. At the same time, Africa will not be in a position to fast-track the development of non-fossil fuels”.

“In fact, even the developed countries will not be able to move as fast as is projected. We see Africa and many regions of the world continuing to rely on fossil fuel energy at a time when deliberate decisions are being made to stop funding fossil fuel projects. The world risks abandoning fossil for renewable, but in the end not getting the renewables, and at the same time losing the fossils due to deliberate neglect,” he explained.

Ibrahim urged African refiners to invest more in technology and develop the right expertise to manage their refineries, which are going to serve the continent as western refiners halt the establishment of more refineries.

Read more at: https://businessday.ng/business-economy/article/dangote-refinery-will-reduce-africas-petroleum-importation-by-36-appo/

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