The commencement of production at the Dangote Refinery, situated in Nigeria’s commercial hub, marks a significant milestone. Despite the refinery’s original start date being set for June 2023, it received its first crude deliveries last year, paving the way for the long-awaited project to begin. As Africa’s largest refinery of its kind, the Dangote refinery has the potential to revolutionize Nigeria’s economy by reducing its dependence on fuel imports.
Initially, the refinery will focus on producing diesel and aviation fuel before expanding to petrol output. Nigeria, despite being a major oil producer and having the continent’s top economy, has struggled with a lack of refining capacity, leading to heavy reliance on imported fuel.
This reliance, coupled with fuel imports and subsidies, has put a strain on foreign exchange reserves during periods of declining oil revenues and currency shortages. The Dangote Petroleum Refinery aims to address these challenges by meeting Nigeria’s domestic demand for refined products and even having a surplus for export.
The Lekki Free Zone, located on the outskirts of Lagos city, is home to a massive facility spanning 2,635 hectares (6,500 acres) of land. This facility, estimated to cost around $19 billion, is set to become a major refinery. Originally slated to open in 2021, it was officially inaugurated in 2023 by former president Muhammadu Buhari.
Following his inauguration, President Bola Tinubu took office and implemented economic reforms aimed at attracting foreign investment and fostering long-term growth. These reforms included ending the fuel subsidy and floating the naira currency.
While these changes initially led to a surge in fuel prices, a decline in the naira’s value, and an increase in the cost of living, President Tinubu has urged Nigerians to be patient as his reform program takes effect. In addition to the Dangote refinery, the Port Harcourt refinery is also expected to commence production.
