DANGOTE REFINERY CRUDE OIL REQUIREMENT
Overview:
- The Dangote Petroleum Refinery is projected to require ₦1.7 trillion worth of crude oil monthly.
- This directive follows President Bola Tinubu’s mandate for the Nigerian National Petroleum Company Limited (NNPC) to sell crude to the Dangote refinery and other domestic refineries in naira.
Government Directive:
- President Tinubu directed the NNPC to ensure the supply of crude oil to domestic refineries, which is expected to stabilize fuel pump prices and the dollar-naira exchange rate.
- This decision was confirmed by the Special Adviser to the President on Information and Publicity, Bayo Onanuga.
Financial Analysis:
- The Dangote refinery, located in Lekki, Lagos, is a $20 billion investment expected to require approximately ₦1.7 trillion in crude oil each month if the NNPC complies with the presidential order.
- Based on 2024 averages, the price of crude is approximately $83 per barrel.
Production Capacity:
- Dangote Industries’ President, Alhaji Aliko Dangote, announced that the refinery aims to achieve a refining capacity of 500,000 barrels per day (bpd) by August 2024 and 550,000 bpd by December 2024.
- This capacity translates to a daily requirement of around $41.5 million worth of crude oil, which equates to ₦56.55 billion, using an average exchange rate of ₦1,362.6/$.
Implications for the Economy:
- The shift to selling crude in naira is anticipated to reduce the cost of petrol and strengthen the naira against the dollar.
- Chief Ukadike Chinedu, National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, emphasized the importance of NNPC meeting the presidential order amidst challenges in increasing crude production.
Expert Opinions:
- Eche Idoko, Publicity Secretary of the Crude Oil Refiners Association of Nigeria, highlighted that selling crude in naira would likely lead to an appreciation of the naira, affecting refining costs and fuel pricing.
Operational Highlights:
- The Dangote refinery is currently online, projecting annual revenue exceeding $26 billion with a storage capacity of 4.5 billion liters.
- The refinery aims to produce 53 million liters of petrol per day and has facilities for the loading and offloading of crude and petroleum products.
NNPC Production Goals:
- The NNPC announced its goal to ramp up crude oil production to 2 million bpd by the end of the year, with recent figures showing production rising from 1.27 million bpd in June to 1.6 million bpd in July.
Overview:
- The Dangote Petroleum Refinery is projected to require ₦1.7 trillion worth of crude oil monthly.
- This directive follows President Bola Tinubu’s mandate for the Nigerian National Petroleum Company Limited (NNPC) to sell crude to the Dangote refinery and other domestic refineries in naira.
Government Directive:
- President Tinubu directed the NNPC to ensure the supply of crude oil to domestic refineries, which is expected to stabilize fuel pump prices and the dollar-naira exchange rate.
- This decision was confirmed by the Special Adviser to the President on Information and Publicity, Bayo Onanuga.
Financial Analysis:
- The Dangote refinery, located in Lekki, Lagos, is a $20 billion investment expected to require approximately ₦1.7 trillion in crude oil each month if the NNPC complies with the presidential order.
- Based on 2024 averages, the price of crude is approximately $83 per barrel.
Production Capacity:
- Dangote Industries’ President, Alhaji Aliko Dangote, announced that the refinery aims to achieve a refining capacity of 500,000 barrels per day (bpd) by August 2024 and 550,000 bpd by December 2024.
- This capacity translates to a daily requirement of around $41.5 million worth of crude oil, which equates to ₦56.55 billion, using an average exchange rate of ₦1,362.6/$.
Implications for the Economy:
- The shift to selling crude in naira is anticipated to reduce the cost of petrol and strengthen the naira against the dollar.
- Chief Ukadike Chinedu, National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, emphasized the importance of NNPC meeting the presidential order amidst challenges in increasing crude production.
Expert Opinions:
- Eche Idoko, Publicity Secretary of the Crude Oil Refiners Association of Nigeria, highlighted that selling crude in naira would likely lead to an appreciation of the naira, affecting refining costs and fuel pricing.
Operational Highlights:
- The Dangote refinery is currently online, projecting annual revenue exceeding $26 billion with a storage capacity of 4.5 billion liters.
- The refinery aims to produce 53 million liters of petrol per day and has facilities for the loading and offloading of crude and petroleum products.
NNPC Production Goals:
- The NNPC announced its goal to ramp up crude oil production to 2 million bpd by the end of the year, with recent figures showing production rising from 1.27 million bpd in June to 1.6 million bpd in July.