A business analyst, Michael Olajuwon, has said there is a need for the newly commissioned Dangote refinery to meet local demands before any other consideration.
The chairman of Dangote Refinery, Aliko Dangote, said on Monday that once the plant is fully commissioned, it is expected that at least 40 per cent of the capacity will be available for export.
Olajuwon, in a piece titled, “Subsidy Removal: Better late than now” said meeting local demand would go a long way to ease the subsidy payment burden of the government as well as guarantee efficient and consistent supply of the product as it is now being handled by a business expert.
According to him, the new refinery would, to a greater extent, eliminate the dollar content of the cost implications in the value chain of oil production, consequently impacting the selling price.
He said, “Dangote refinery should bring reprieve to the country and the continent by fundamentally tackling the earlier enumerated challenges, which hitherto had proven unassailable. The refinery, which is an installed capacity of 620,000 barrels of oil daily, will sufficiently cater to the daily consumption of Nigerians, which is estimated at 428,000 barrels daily.
“The single fact that we will now refine the oil locally has, to a greater extent, eliminated the dollar content of the cost implications in the value chain of oil production, consequently impacting on the selling price.
“I am not too conceited that our woes are over, knowing fully well that capitalism is about maximising profit; however, with 20% stake in the project, the government can and should persuade the Dangote group to meet local demand first before any other consideration. This will go a long way to ease the subsidy payment burden of the government as well as guarantee efficient and consistent supply of the product as it’s now being handled by a business expert.”
He said the same support given to Dangote to achieve the landmark and lifetime achievement should be extended even more to other serious investors to enable more refineries to spring up.
On the effect of subsidy payment, Olajuwon described it as a perennial challenge before the Nigerian government, adding that efforts to fight the rot in the oil and gas have been met with stiff resistance.
He said out of the $70 billion invested in the oil and gas sector in Africa between 2015- 2019, Nigeria attracted only 4 per cent, despite being the largest oil producer on the continent.
“Government should do more to attract more investments into the sector to further boost production. With OPEC falling below its target by 3.6 mbpd, there is a ready market for us if we can bridge the supply gap,” he added.