Provision of job opportunities: The refinery is expected to create thousands of direct and indirect job opportunities. According to the latest report titled “Sailing through troubled waters”, by CardinalStone, a research firm, the Dangote refinery currently employs about 33,000 individuals and is projected to rise to 100,000 once the facility reaches full capacity.
Saving on foreign exchange: Nigeria will no longer need to import refined petroleum products, saving billions of dollars annually. Nigeria can now spend that money on other important things. “… the refinery has the potential to result in FX inflows of about $15.0 billion for Nigeria, equivalent to 45.8% of the current gross foreign exchange reserves. This substantial foreign exchange gain is expected to have a positive ripple effect on manufacturing companies by improving liquidity across various foreign exchange channels,” the report said.
Stabilising the naira: Petroleum products are the biggest drain on the nation’s forex. Eliminating this demand will create more supply of dollars than demand, reducing and ultimately stabilising the value of the naira.
Reduction in Inflation: Nigeria’s headline inflation rose to 28.2 percent in November 2023, according to the National Bureau of Statistics. If the exchange rate comes down, inflation will naturally come down as well. Meanwhile, inflation is projected to revert to its long-run average of 14 percent by 2025.
Boosting industries and productions: BusinessDay reports that GSK, P&G and some other multinational companies made moves to exit Nigeria due to an unfriendly business environment. The Dangote refinery has come to save the day for allied industries. It is like a rising tide that lifts all boats.
Long queues and fuel shortages will end: With the Dangote, Port-Harcourt and Warri refineries, if they operate at full capacity, Nigerians can finally say goodbye to lingering fuel scarcity and long queues at the filling stations.
Transitioning to an era of self-sufficiency: The Dangote refinery is set to transition Nigeria from a period of relying on other nations for petroleum products to self-sufficiency in petroleum refining, which is a huge step forward for the country. When the refinery reaches its full capacity, Nigeria can export both crude oil and refined petrol to neighbouring countries.
On the whole, the Dangote Petroleum Refinery’s commencement sparks anticipation of positive changes, yet the immediate impact on petrol prices remains uncertain. Factors like crude oil costs, exchange rates, and government interventions are pivotal. Despite this, the refinery promises job creation, reduced import reliance, naira stabilisation, inflation reduction, industrial growth, and potentially ending fuel shortages. Nigeria edges closer to self-sufficiency, a vital step for economic and energy independence.
