Dangote Refinery Faces Backlash Over Dollar Sales, Expands Exports and Boosts Local Industry
Oil marketers in Nigeria, represented by the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), have strongly opposed the decision of the Dangote Petroleum Refinery to sell refined petroleum products in dollars. The association voiced concerns that this move, which follows the suspension of the naira-for-crude deal, could exacerbate inflation and place undue pressure on Nigeria’s foreign exchange market. PETROAN urged the government to intervene and ensure that transactions within the country continue in the local currency to avoid further economic strain.
In addition to its domestic fuel distribution, the Dangote refinery has ramped up its fuel exports, notably shipping aviation fuel to the United States. Six vessels carrying nearly 2 million barrels of jet fuel have already arrived in the U.S., marking a significant step for Africa’s largest refinery in reshaping global fuel trading dynamics. While this expansion into international markets is seen as a victory for Dangote, local marketers are concerned about the potential shortage of supply within Nigeria as domestic refineries still struggle to meet the country’s full demand.
The Dangote refinery’s new production of polypropylene is also drawing attention for its potential to revive Nigeria’s struggling textile sector. The Manufacturers Association of Nigeria (MAN) highlighted that the local production of polypropylene, which had previously been mostly imported, will save Nigeria up to $267 million annually in foreign exchange. The availability of polypropylene locally will reduce manufacturing costs, boost the textile and plastic industries, and reduce reliance on imports, helping the country work toward self-sufficiency and foreign exchange generation.
Dangote’s $2 billion petrochemical plant in Lagos is set to further strengthen Nigeria’s economy by producing 77 grades of polypropylene, aiming for a capacity of 900,000 metric tonnes annually. This development promises to create thousands of jobs, increase tax revenues, and reduce Nigeria’s dependence on foreign exchange for imports of petrochemical products. With such advancements, Nigeria hopes to achieve greater economic self-sufficiency, with the plant’s success potentially marking a turning point in the country’s industrial development and GDP growth.
source: punch