Investments in Modular Refineries in Nigeria at Risk if Dangote Refinery Continues to Lack Crude Oil Supplies

Hamlet answered Lord Polonius, “Words, Words, Words”. And in “The Rime of the Ancient Mariner”, Coleridge muttered “Water, water everywhere, / Nor any drop to drink”. And the peerless Achebe wrote, “an adult does not sit and watch while the she-goat suffers the pain of childbirth tied to a post”.

Good People, it is now “oil, oil, oil, all over Nigeria, but Dangote Refinery cannot find oil to refine”. Yes, “the much-anticipated launch of Dangote Oil Refinery’s petrol supply operations in Nigeria, initially slated for July, is facing significant delays due to a critical shortage of crude oil, BusinessDay has reported, citing sources within the industry. This setback underlines a broader issue: the Nigerian National Petroleum Company (NNPC)’s failure to meet its obligation to supply the refinery with the necessary crude oil”.

Faced with the NNPC’s inadequacies, Dangote Refinery has been forced to look elsewhere to secure the crude oil for refining. This has included jettisoning its tradition of keeping its search for crude oil within the domestic market, to source from the United States. While this strategy demonstrates Dangote Refinery’s resilience and proactive approach, it also underlines new challenges, thwarting its plans to begin fuel supply in Nigeria in earliest time.

Importing crude from the US involves navigating logistical hurdles and incurring additional costs. These factors have inevitably contributed to delays in the refinery’s operational timeline. Despite these efforts, the refinery has only managed to take delivery of a limited amount of crude, insufficient for full-scale operations.

Those running this oil show must deliver for this refinery, because the words of Achebe matter here. If this paralysis is not resolved, investors will run away from all those modular refineries. Indeed, if Dangote Refinery cannot get crude oil to refine, why waste money on the smaller players? Someone must lead and resolve this matter.

Shortage of Crude Oil Supply to Delay Dangote Refinery’s Plan to Hit Market in July

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