Importation of petroleum products into Africa will cut by 36%, the Secretary-General of the African Petroleum Producers Organisation (APPO), Omar Ibrahim, has disclosed, citing Dangote Refinery as reason behind projection.
Ibrahim said when Dangote Refinery commences operation in Lagos, Nigeria, it would supply over 12% of Africa’s products, and that the facility would become operational before 2023, after two postponements.
Africa imports 43% of the petroleum products it consumes, with 57% produced on the continent. In total, about 4.3 million barrels is consumed by Africans daily.
In a statement obtained by Ripples Nigeria, Ibrahim stated that aside from Dangote Refinery reducing importation by 36%, it would also cutback on foreign exchange spent on oil, increasing availability of forex.
“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, 57% is produced locally (on the continent) while 43% is imported. When Dangote is fully onstream, the percentage of Africa’s products import shall drop to 36%. This is even as the total volume of products demand rises to 5.4 mbd. You can therefore see the huge impact that Dangote refinery shall be making to overall products supply in Africa. Dangote shall be supplying over 12% 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.”
He said investment into refinery is safe despite the current campaign against fossil fuels, and with Europe and North America not pushing more refinery construction, Dangote and other investors commitment in Africa is highly need.
“African refiners have no cause to worry about their investments. All they need to do is to ensure that they have developed the right expertise to manage their refineries, get honest managers and staff to run their business and come together to join APPO’s initiative to establish foundries and other equipment manufacturing plants to service their refineries. Once they have these, the market is there for their products.
“For the next three decades or more, Africa shall continue to use fossil fuel-driven vehicles and with its population projected to double within that period, there will be a huge market for petroleum products.
“Africa cannot rapidly transit into electric vehicles, as the bulk of the vehicles on our roads today and in the next 20-30 years are going to be non-electric. There is the market, and we should not be discouraged from thinking positively.” the APPO scribe noted.
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