BUILT at the cost of $18.5 billion the Dangote refinery has the capacity to produce 650,000 barrels of crude oil per day. Powered by a 435-megawatt power plant, the Dangote refinery can employ 100,000 Nigerian youths in both formal and informal positions. Able to generate 12,000 megawatts of electricity, the refinery can enable the nation save $26 billion annually from petrochemical plant and fertilizer importations. These facts need to be illustrated, seen in the context of the recent commissioning of the Dangote refinery by the former president, Muhammadu Buhari, and the coming into operations of the refinery hopefully in July, and what the refinery can do for the country.
ACCORDING to the National Bureau of Statistics, 53.40 % of youths in 2021 suffered from unemployment, a figure pegged at over 80 million people, making the country record the second highest number of unemployed youths in the world, overtaken only by South Africa. In a recent report, Nigeria suffers from the menace of massive importation of refined petroleum products at $11.3 billion just two years ago. According to Central Bank Governor, Godwin Emefiele, Nigeria suffers yearly on the issue of fiscal expenditure on petroleum, spending five to seven trillion naira yearly.
THE Hope excitely welcomes the entrance of Dangote refinery into the market which at full capacity can meet 100 per cent of local consumption of petroleum products. It debut would reduce dependence on imports and create huge job opportunity definitely reduced the suffering from the desperate unemployment situation in the country, reduce the large sums of money used to import refined petroleum products, as well as save the federal government on the huge money spent on fiscal expenditure.
GOING by the provisions of the Petroleum Industry Act, the federal government should have removed subsidies by the end of the April, but refrained Dangote refinery had not come on stream and thus making the government postpone subsidy removal to the end of June, but fast tracked to end of May as recently announced by President Tinubu. In the words of the Group CEO of the Nigeria National Petroleum Company Limited (NNPCL), Mele Kyari, money spent on the same fuel subsidy over the years had proved a burden on his corporation, with $400 million spent on it monthly.
ACCORDING to other sources, the money spent on fuel subsidies had caused another problem to the NNPCL, especially when the Federal Ministry of Finance, Budget, and National Planning refused to make refunds of $6.1 billion to the company over spending on subsidies. In other words, the Dangote refinery comes at a good time, since the federal government gets respite from the money spent on the payment of subsidies in the long term, while the refinery saves the NNPCL from discomfort over the burden caused by subsidies, mitigating its friction with the Federal Ministry of Finance, Budget, and Planning, only that the federal government is acting a month too early.
ANXIOUS to throw away the burden of subsidies and not waiting for Dangote refinery to flood the market with its refined products in July, the federal government refuses to fund subsides for June, allowing the prices of fuel to escalate by over 150 percent in many parts of the country, with fuel stations in Akure selling the product at between N500 and N700 per litre.
WHILE the federal government is yet to put measures in place to mitigate the effects of the expected price hike arising from the removal of subsidies, it refuses to fund subsidies for June, and making millions of Nigerians to face the agony of paying higher prices for fuel.
THE Hope frowns at a situation where the federal government refuses to fund subsidy payments before Dangote refinery commences operations, especially when millions of the masses now face high fuel prices, without mitigating measures for them.
CONSEQUENTLY, we call on the federal government to put in place measures to mitigate the effects of removal of subsidies. We call on the federal government to apply savings on the subsidy removal in future to lessen the pains of citizens through employment generation ventures. The federal government should ensure a free market situation exists in the petroleum sector when eventually Dangote rolls out its products.
THE government can do this by selling its existing refineries to private individuals, to create a healthy competition and halt the possibility of Dangote operating as a monopoly. The new administration should encourage modular refineries to curb oil thefts and promote peace in the troubled oil producing regions in the country.
THE federal government should ensure standard practices in industrial relations by enforcing environmental guidelines to check possible negative ecological outcomes during the operations of the Dangote refinery. Finally, the Dangote group should work its talk by making sure refined petroleum products roll out by late July as it promised.