Fakoyejo OlalekanThe S&P Global commodity Insight has revealed that the oil refinery Aliko Dangote is building will not reach full capacity before the end of 2024.
According to S&P, the Dangote refinery is expected to commence operation in the fourth quarter (Q4) of 2023, after several postponements of the operation.
The research company disclosed this in its report titled: “Africa energy review and outlook 2022-23: Turbulence on the road to recovery”, which was released in March.
Prime Business Africa learnt from the report that the Dangote refinery will be a major contribution to Nigeria’s fuel supply, however, its inability to reach full capacity between 2023 and 2024 will place the country at the mercy of European countries which will have reduced volume this year due to embargo placed on the global supplier, Russia, in February 2023, following its invasion of Ukraine.
African countries depend on European nations for refined commodities after transporting the crude oil to the western countries where major of the world’s refineries are located.
More western countries are expected to hoard fuel due to the possibility of scarcity and reduction in volumes of the commodity due to the ban on Russia’s oil.
S&P said there’s a looming fuel scarcity, and Nigeria, as well as other countries, will be at risk due to the absence of refineries and they are dependent on European countries.
“There is a possibility for additional domestic supply in the immediate term, but this hinges on the restart of South Africa’s Astron refinery. Nigeria’s Dangote refinery, once online, is expected to provide substantial additional volumes that will relieve pressure from supply constraints across the region.
“But the giant greenfield refinery still has a ways to go. It is expected to come onstream only after the fourth quarter of 2023 and not reach full capacity before the end of 2024,” the report reads.
It said Nigeria’s risk score will come under pressure owing to uncertainties caused by the 2023 elections, which could disrupt the implementation of the 2021 Petroleum Industry Bill, which is meant to deregulate the oil and gas industry in Nigeria.
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