Dangote Refinery To Commence Sale Of Petrol By 2021

– Says Establishment Of More Refineries Will Crash Petrol Price By 50%

Dangote Group has disclosed plans to hit the Nigerian market with its refined petroleum products by 2021 as the construction of its 650,000 barrels per day capacity refinery near completion.

The Executive Director, Strategy, Capital Projects and Portfolio Development, Dangote Group, Devakumar Edwin, who confirmed this said that the refinery was at 80 per cent completion, with engineering and construction at 100 per cent over while procurement was 98 per cent ready.

“If you look at the overall percentage completion we are at 80 per cent. But that overall includes engineering and design, which is 100 per cent over. Procurement is about 98 per cent over. So, it covers various aspects. But the core activity which is going on today is construction.”

Noting the delay occasioned by the coronavirus pandemic, Edwin said that overall, the construction is at 80 per cent level, adding that reasonable progress has already been made.

“So, now, we hope to complete everything by the middle of next year. Then, we will start the commissioning process. Middle of next year, we start the commissioning process, and it’s a huge refinery, the commissioning process may take three to four months.

“And then with start of products coming into the market. So, by last quarter next year, we should have our products coming into the market.

Speaking further, Edwin said that the basic economic principle of demand and supply would be a determining factor when considering the impact of the refinery on the price of petrol in the country.

He added that the increase in refining capacity in the country would result in the rise in supply of petroleum products which will bring down the price of the product.

“This is a basic economic principle, demand and supply. When the demand exceeds supply, the price will go up. When the supply exceeds demand, the price will come down.

“You can see it in the refinery too. BUA too has announced that they are going to put up 200,000 barrels per day refinery. And you can see a lot of cottage refineries coming up 5,000 barrels, 3,000 barrels.

“So as more capacity comes in, the philosophy of demand and supply will automatically act. Yes, it (petrol price) will not crash in one day but with a period of time it will come down to almost half the price currently.”

Edwin further stated that the group’s primary aim of venturing into building petroleum refinery was to add value to the country, especially as the nation’s foreign exchange has been getting weak over the years.

He added, “One of the primary reasons foreign exchange is just getting drained out is the issues surrounding fuel.

“We all know the acute crisis we are facing in dollars. I have been with you for 29 years, I have never seen this kind of crisis. There is something really radically wrong somewhere.

“Even during Abacha’s time when it was $8 per barrel, we didn’t face this kind of crunch. So if you have this kind of refinery, the forex outflow will be minimised, the currency destabilisation will stop.

“By the grace of God, probably the currency can even get strengthened because after all, a lot of naira is chasing a few dollars. So your dollars can be saved within the country.”

Edwin, however, stated that finished products from the Dangote Fertiliser Plant will be in the market this month.

According to him, 20,000 people are working in the refinery project, adding that the group plans to employ over 240, 000 people.