…as firm commits to PMS rollout in July
…NNPC attributes long queues to flooding, logistical challenges
S & P Global Ratings, one of the world’s leading ratings agencies, has tipped the multibillion-dollar Dangote Refinery to help Nigeria address the foreign exchange supply constraints, adding that the facility has the potential to accelerate the nation’s economic development.
Ravi Bhatia, Director and Lead Analyst, Sovereign and International Public Finance Ratings, S&P Global Ratings, who led the firm’s delegation to Lagos State, as part of the sovereign credit ratings assessment of Nigeria, made this disclosure in Lagos while in company of officials from the Federal Ministry of Finance.
Other members of the S & P team included Maxmillian McGraw, Associate Director, Sovereign Ratings, Omegu Collocott; Director, Corporate Ratings; Charlotte Masvongo, Senior Analyst, Bank Ratings as well as Samira Mensah, Director, Financial Services S & P Global.
“Nigeria is a big exporter of crude but has issues with importing refined fuels. So, there is a gap in the market where crude can be refined in Nigeria, save money that way, and potentially save some foreign exchange. This will be positive for the economy in the medium term. It looks positive from our assessment,” Channels and Arise TVs quoting Bhatia to have said.
“It is a very impressive facility, able to process 650,000 barrels a day, when in full capacity. It is the largest single-train refinery complex in the world. It came out quite quickly,” he added.
This is as Devakumar Edwin, vice-president of oil and gas at Dangote Industries Limited (DIL), reiterated that the $20 billion Dangote refinery Complex was on track to commence petrol production in July this year.
Edwin said the Dangote Refinery operates at a capacity of 350,000 barrels per day (bpd), but there are plans to scale up to at least 500,000 bpd by July/August when the plant begins the refining of petrol and ultra-low sulphur diesel.
He added that the plant hopes to spark a positive cycle of industrial development, job creation, and economic prosperity by using Africa’s abundant crude oil resources to make refined products domestically.
Refined petroleum products, especially the Premium Motor Spirit (PMS) remain the major source of draining Nigeria’s foreign exchange as they account for a huge portion of the nation’s imports in every quarter.
As at the end of the first quarter of this year, Nigeria spent N2.63 trillion on the importation of PMS, and another N1.19 trillion on importing gas oil. Both products accounted for 30 percent of Nigeria’s import bill during the first quarter of this year.
The huge amount expended on PMS imports was further exacerbated by the high naira volatility in the foreign exchange market. This is as the nation’s currency, the naira, continues to lose ground against other international major currencies such as the US dollar and Euro.
As of July 5, 2024, the US dollar at the Nigerian Foreign Exchange Market (NFEM) closed at N1512.7/$. The naira closed at N1636.06/euro, and it was N1682.29/Swiss Franc.
The Naira-Yen exchange rate was N9.384/Yen, while the Naira-Riyal and Naira-Yuan exchange rates were exchanged at N403.24/Riyal and N208.09/Yuan as at the reference date.
Meanwhile, the Nigerian National Petroleum Company Limited (NNPCL) has attributed the long queues in some petrol stations across the country to the flooding that ravaged many states across the country, adding that the incident worsened the firm’s logistical challenges. This was made known yesterday through a statement from the company’s X handle.
“The NNPC Ltd wishes to state that the fuel queues seen in the FCT and some parts of the country, were as a result of disruption of ship-to-ship (STS) transfer of Premium Motor Spirit (PMS), also known as petrol, between Mother Vessels and Daughter Vessels resulting from recent thunderstorm,” Olufemi Soneye, Chief Corporate Communications Officer at the NNPC, said.
“The adverse weather condition has also affected berthing at jetties, truck load-outs and transportation of products to filling stations, causing a disruption in station supply logistics. The NNPC Ltd also states that due to flammability of petroleum products and in compliance with the Nigerian Meteorological Agency (NIMET) regulations, it was impossible to load petrol during rainstorms and lightning,” he added.
