Nigeria has been making waves in the oil market with the opening of Dangote Refinery. The $20.5 billion project started producing PMS in September 2024, and by November, it reached full operations. The refinery, which processes 650,000 barrels of crude per day, is already having a big impact.
Before this, Nigeria relied heavily on imported petroleum products. But now, with the Dangote Refinery in full swing, Nigeria is producing much of its own fuel. This is disrupting the European market, which previously exported large quantities of petroleum products to Africa. According to OPEC, this shift is expected to lower Nigeria’s need for petroleum limports from Europe, worth around $17 billion a year.
This refinery is not only helping Nigeria cut down on imports but is also saving the Nigeria valuable foreign currency. It’s a big win for Nigeria’s economy.
The Oil Mafia: A Struggle for Control
However, the refinery’s rise has caused friction within Nigeria’s oil industry. Aliko Dangote, the billionaire owner of the refinery, has clashed with Nigeria’s oil cartels, which have long dominated the Nigeria’s oil trade. These powerful groups are unhappy with the refinery’s ability to bypass their control and are doing everything they can to stop the disruption to their business.
Dangote himself has openly acknowledged the power of these groups, calling them stronger than the drug cartels. Despite this, the refinery promises to be a game-changer for Nigeria’s oil sector.
Nigeria’s Oil Production: The Challenges Ahead
Unfortunately, Nigeria’s oil sector is facing several challenges. Nigeria has long struggled with oil theft, which has affected its production. The Nigerian National Petroleum Company (NNPC) has also faced difficulties in providing enough crude to feed the Dangote refinery. Some estimates suggest that the refinery can only get about 300,000 barrels per day from local sources.
Oil theft, pipeline issues, and a decline in production have all contributed to a drop in Nigeria’s oil output in recent years. Despite these issues, the Dangote Refinery remains a significant step towards improving Nigeria’s energy future.
