Africa becomes destination for economic oil products, often toxic, losing $ 90 billion a year, swallows complaints

Africa is increasingly becoming a destination for economic, often toxic oil products, many of which are mixed with poor levels that would not be authorized in Europe or North America.

This concern was raised by the President/CEO, Dangote Industries Limited, Aliko Dangote, during the refined fuel conference of West Africa in Corso held in Abuja.
The event is organized by the oil regulation authority (NMDPRA) and the ideas of the S&P global raw materials.

Dangote has revealed that, due to the limited national refining capacity of the continent, Africa matters over 120 million tons of refined oil products per year, at a cost of about $ 90 billion.

While appreciating the management of the Nigerian NGC Nigerian National PetroLeum Limited (nnpc), for having made available some loads of Nigerian crude oil from us since the beginning of production, has revealed that the company, monthly import between 9-10 million barrels of crude oil from the United States of America and other countries.
He said: “While we speak today, we buy 9-10 million barrels of raw monthly from us and other countries. I have to thank Nnpc for making some loads of Nigerian crude oil from the beginning of production available.”

Dangote also said that despite producing about 7 million barrels of crude oil per day, Africa refines only about 40% of its 4.3 million barrels daily consumption of refined products at national level. In stark contrast, Europe and Asia perfect over 95% of what they consume.

“So, while we produce a lot of crude oil, it also matters over 120 million tons of refined oil products every year, effectively exporting jobs and importing poverty on our continent. This is a market opportunity from $ 90 billion that is captured by the regions with an excess refining capacity. Year,” he said.

As he reaffirms his belief in the power of free markets and international cooperation, Dangote stressed that trade must be based on economic efficiency and comparative advantage, not at the expense of quality or safety standards. He underlined that “challenges the logic and the economic sense that Africa exports raw crude oil to import refined products: products that we are more than able to produce ourselves, closer both at the source and to consumption”.

Reflecting on the experience of providing the largest single -training refinery in the world, Dangote also highlighted a series of affected challenges, including technical, commercial and contextual obstacles for the African landscape.

The richest man in Africa described the construction refineries such as the oil refinery of cranks like one of the most intensive and logistically complex industrial structures of capital ever built. The refinery project of Dangote, he said, requested the release of 2,735 hectares of land (seven times larger than the island of Victoria), of which 70% was swampy, which requires the pumping of 65 million cubic meters of sand to stabilize the site and lift it from 1.5 meters, over 250,000 foundation piles and millions of meters of pipe, wiring and electric among others.

“At the height, we had over 67,000 people on site, of whom 50,000 are Nigerians, who coordinated all day through hundreds of disciplines and nationality. Then, of course, the Covid-19 pandemic arrived who brought us back to us and brought new levels of complexity, interruption and risk. But we persecuted,” he observed.

The refinery also required the construction of a dedicated maritime port, since the existing Nigerian ports could not manage the size and volume of the required equipment. This included over 2,500 pieces of heavy equipment, 330 cranes and even the establishment of the largest granite quarry in the world, with a production capacity of 10 million tons per year.

“In short, we have not simply built a refinery: we built an entire industrial ecosystem from scratch,” he said.

Despite the technical success of the refinery, Dangote has identified significant commercial challenges, in particular the exchange rates that went from N156/$ at the beginning of N1,600/$ to completion and challenges around the crude oil prosecutor. Although Nigeria is said to produce about 2 million barrels per day, the refinery has fought to guarantee crude oil to competitive terms.

“Rather than buying crude oil directly from the Nigerian producers in competitive terms, we found ourselves having to negotiate with international commercial companies, who were buying Nigerian crude oil and claimed it, with heavy prizes, of course.

Logistic and regulatory bottlenecks also had a toll. According to reports, port and regulatory expenses represent 40% of total transport costs, sometimes they cost two thirds as much as the transformation of the ship itself.

“The refineries in India, which buy raw oil from the regions even further, enjoy lower transport costs than we do right here in West Africa because they are not saddened with exorbitant port accusations,” said Dangote.

He added that, in terms of port charges, it is currently more expensive to load a domestic load of oil products from the refinery of dance, since customers pay both at the loading point and at the exhaust point. On the contrary, when they load from Lomé, who compete with them, they pay only to the discharge point.

Dangote has further criticized the lack of fuel standards harmonized through African nations, which creates artificial barriers for the regional trade in refined products.

“The fuel we produce for Nigeria cannot be sold in Cameroon or Ghana or Togo, even if we all drive the same vehicles. This lack of harmonization does not benefit anyone, except, of course, international traders, who prosper on the refinement. For local refineries like us, fragments the market and requires unnecessary inefficiencies.”

Dangote, affirming the challenge with diesel production in Africa, observed: “To give an example, the Cloud Diesel point for Nigeria is 4 degrees. Without going into technical details, this means that diesel should work at a temperature of 4 hundreds.

He also mentioned the growing influx of discounted and low quality fuel from Russia, mixed with Russian crude oil under the price limits and downloaded in African markets.

“And to worsen things, we are now facing an increase in the dumping of economic oil products, often toxic, some of which are mixed with poor levels that would never have been allowed in Europe or North America,” he said.
Dans invited African governments to follow the example of the United States, Canada and the European Union, which have implemented protective measures for domestic refineries.