Not a great sign for Nigeria if we move from importing petrol to importing crude oil. Yes, “Dangote Refinery will establish an oil trading unit that will help source feedstock for its 650,000 barrels per day plant on the outskirts of Lagos, Reuters reported on Tuesday, citing sources. The oil trading arm, likely to be situated in London, takes away the need to hire commodity traders for crude supply and related services, which could help scale back costs.”
Nigeria can still help Dangote Refinery by providing it with enough crude oil. If not, if the refinery sources for feedstock from outside Nigeria, do not expect it to sell in Naira within Nigeria. Simply, if Nigeria does not fix this feedstock sourcing problem, we can have a lost decade as a result of the currency crisis since we have nothing that will generate significant US dollars for the nation’s balance of payment.
Indeed, the failure of Dangote Refinery to use local crude oil and help Nigeria to disintermediate the importation of petrol will distort all our recent economic models on strengthening the naira. Hope our leaders are paying attention now that Dangote Refinery is likely going to have a trading office in London!
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LONDON, March 5 (Reuters) – Africa’s richest man Aliko Dangote is planning to set up an oil trading arm, likely based in London, to help run crude and products supply for his new refinery in Nigeria, six sources familiar with the matter said.The move would reduce the role of the world’s biggest trading firms, which have been negotiating for months to provide the refinery with financing and crude oil in exchange for products exports. The giant 650,000 barrel-per-day refinery is set to redraw global oil and fuel flows and the trading community is closely watching the way it will operate.
Not a great sign for Nigeria if we move from importing petrol to importing crude oil. Yes, “Dangote Refinery will establish an oil trading unit that will help source feedstock for its 650,000 barrels per day plant on the outskirts of Lagos, Reuters reported on Tuesday, citing… pic.twitter.com/zzRWlY5siq
— Ndubuisi Ekekwe (@ndekekwe) March 6, 2024
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Did the NNPC acquire 20% of Dangote Refinery to enjoy future dividends alone, or what was the national security implication cited about? A giant refinery that pretty much crippled everything else during its construction, with the promise that petrol importation would almost disappear. The only contending issue that time was whether the refinery would make petrol price cheaper, nobody ever mentioned that the crude oil would be imported. Now this…
The people we are licensing and urging to build ‘modular refineries’ with reckless abandon, where will they source their own crude oil and who will be guaranteeing supply? We seem to deliberately defraud people, distort projections, and willfully withhold critical information that aids decision-making. Should our authorities start feigning ignorance as though they didn’t foresee this scenario? When crude oil yet to be produced were sold upfront, what was the plan for Dangote Refinery? It’s almost impossible to explain this sort of wickedness and dishonesty, because any argument put forward would be flattened by common sense.
We lie to ourselves, we have complete disregard to fatherland, no form of sacred duty, neither to the people nor our common heritage. We have disappointed again.