Aliko Dangote, President of the Dangote Group, has explained why Nigerians need to stop mortgaging crude oil.
Speaking at a summit organised by the Crude Oil Refinery Owners Association of Nigeria in Lagos, he lamented that while nations like Norway invest their oil revenues into future funds, Nigeria and other African countries are depleting their future oil proceeds.
Dangote emphasized the need for Nigeria to stop mortgaging its crude oil to secure a steady supply of feedstock for local refineries.
“To ensure adequate feedstock availability, we must halt the practice of mortgaging crude oil. It’s unfortunate that while countries like Norway channel oil revenues into national wealth funds, we in Africa are spending future oil revenues today,” Dangote stated.
The Nigerian National Petroleum Company Limited (NNPC) had committed to supplying 272,500 barrels of crude oil daily through various crude-for-loan agreements totaling $8.86 billion.
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This commitment indicates that approximately 8.17 million barrels of crude will be allocated monthly for these loan deals, as highlighted in an analysis by the Nigeria Extractive Industries Transparency Initiative and NNPC financial statements.
During the summit, Dangote, represented by Group Executive Director Mansur Ahmed, stressed the importance of prioritizing the domestic crude supply obligation and increasing crude production capacity to meet refinery demand.
He revealed that the Dangote refinery, with a capacity of 650,000 barrels per day, was constructed without any government incentives.
However, he urged that to transform Nigeria into a regional refining hub, investor incentives are crucial.
Dangote also noted the impending arrival of 1.8 million barrels of new refining capacity in Kuwait, China, and Bahrain over the next three years.
