Vessel with stolen crude intercepted in Nigeria

Nigeria's state-owned oil firm NNPC Ltd said on Monday an 800,000-litre (211,338-U.S. gallon) vessel carrying stolen crude had been intercepted offshore while heading to Cameroon and would be destroyed as a deterrent to oil theft.

Crude theft from pipelines and wells in the Niger Delta has hobbled the country's output in recent years and is one of the biggest challenges to confront new President Bola Tinubu.

NNPC said the oil was stolen from a well in south western Ondo state. The MT Tura II vessel was owned by locally registered Holab Maritime Services Limited and had no valid documentation for the oil, the company said.

Holab could not be reached for comment on numbers listed on its website.

"Destroying vessels involved in transporting stolen crude oil is of paramount importance as a strong deterrent," NNPC said.

NNPC circulated a video showing the vessel surrounded by armed Nigerian security agents.

Reporting By MacDonald Dzirutwe, Reuters

Related stories: 12 including 2 British nationals arrested for oil theft in Nigeria

Top buyers of stolen Nigerian oil are in the Balkans and Singapore

Nigerian Authorities Launch App to Monitor Crude Oil Theft

 

 

Petrol use in Nigeria down 28% after subsidy scrapped

Nigeria's average daily petrol consumption has fallen by 28% since President Bola Tinubu scrapped a popular but costly subsidy on the fuel at the end of May, data from the industry regulator shows.

Average daily petrol consumption fell to 48.43 million litres in June, down from the previous average of 66.9 million, according to figures released to Reuters by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

A subsidy had kept prices cheap for decades in Africa's biggest economy but it became increasingly expensive for the country - the government spent $10 billion last year - leading to wider deficits and driving up government debt.

Since the subsidy was ended, a black market in neighbouring Cameroon, Benin and Togo that relied on petrol smuggled from Nigeria has collapsed.

Despite having spent $2.41 billion on the subsidy in the first five months, Nigeria could save up to $5.10 billion this year from scrapping the petrol subsidy and from FX reforms, the World Bank said on June 27.

By Elisha Bala-Gbogbo, Reuters

Related stories: Video - Fuel prices in Nigeria nearly double after oil subsidy's end

Black market collapses in Nigeria due to fuel subsidy removal

Video - President bola Tinubu on a mission to change Nigeria

 

 

Video - Fuel prices in Nigeria nearly double after oil subsidy's end

Many countries are scrapping oil subsidies and raising taxes to help generate revenue. Nigeria's fuel subsidy kept prices below half the real cost since the 1970s. And now, consumers are being forced to pay up as the government tries to recover those losses.

CGTN

Nigeria projected to save $28 Billion after ending fuel subsidies

Nigeria will save more than 21 trillion naira ($28 billion) in two years after scrapping gasoline subsidies and allowing its currency to weaken, according to the World Bank.

The savings will help President Bola Tinubu’s government cut its record fiscal deficit and a debt-service burden that surpassed revenue in 2022, the Washington-based lender said in a report. The budget shortfall will narrow to 3.9% of gross domestic product by 2025 from 5.1% this year, according to the report.

Scrapping the fuel cap will enable Nigeria’s state oil company to export crude instead of setting it aside to pay for the subsidies. Easing foreign-exchange controls will help the government convert overseas earnings at market prices rather than at “overvalued” rates, the bank said.

It forecast Africa’s biggest economy will expand 4% from 2024 should it implement urgently required reforms. The continent’s most populous nation has for years resisted calls by the World Bank to do away with its costly gasoline subsidies and myriad exchange rates that have stymied growth.

Africa’s largest crude producer should take further steps to increase non-oil revenue, lower inflation and expand the social safety net to protect the poor and most vulnerable, the World Bank said.

“The government could propose a compact with Nigerian citizens that directly links the phased-out subsidy to compensatory cash transfers,” it said.

More from the report:

. Inflation will accelerate to an average of 25% this year, compared with 18.8% in 2022
 

. Debt service as a proportion of federal government revenue will drop to 76% by 2025 from 121% this year.

By Anthony Osae-Brown, Bloomberg

Shell's Trans Niger pipeline spill under investigation by Nigeria

Nigerian authorities and Shell's local subsidiary were on Monday investigating the cause of a spill on the Trans Niger pipeline that lasted several days.

The 180,000-barrel-per-day pipeline is one of two conduits to export Bonny Light crude.

The spill at Eleme in Rivers state was detected on June 11 and four days later, Shell Petroleum Development Company of Nigeria Limited (SPDC) confirmed it in a statement.

Environmental rights groups said the spill lasted a week before it was contained.

A team comprising SPDC, Nigerian Oil Spill Detection and Response Agency and local communities were at the site on Monday to gather information, analyse data, examine physical evidence, and assess the causes of the leak, said Youths and Environmental Advocacy Centre which monitors spills in the Niger Delta.

A Shell spokesperson confirmed Monday's visit to the site.

The investigation will determine the volume of oil spilt.

Shell has over the years faced several legal battles over oil spills in the Niger Delta, a region blighted by pollution, conflict and corruption related to the oil and gas industry.

The oil major blames most of the spills on pipeline vandalism and illegal tapping of crude.

Thandile Chinyavanhu, Greenpeace Africa climate and energy campaigner, said the latest spill compounded Shell's record in one of Africa's leading oil producers.

"Shell must be held accountable and financially responsible for this spill and for its neocolonial role in causing climate loss and damage," Chinyavanhu said. 

By Tife Owolabi, Reuters

Nigeria amasses $3 billion debt to traders for oil swaps

Nigeria has accumulated up to $3 billion in debts to trading houses such as Vitol and oil majors such as BP (BP.L) for fuel supplies and is trailing four to six months behind schedule in repaying them with cargoes of crude, four traders and executives told Reuters.

Nigeria will likely take months to clear the debt, which will complicate reforms by new President Bola Tinubu aimed at weaning Africa's largest economy and most populous nation off costly fuel subsidies that have contributed to growing debt and foreign exchange shortages.

In his first two weeks in office, Tinubu removed petrol price caps and restrictions on the naira currency – liberalisation changes that investors have been awaiting for more than a decade.

As part of those reforms, Nigeria, Africa's top oil producer, plans to scrap an old scheme by which it swaps its crude for gasoline imports. Nigeria for years sold the gasoline, bought at the open market price, to its population at a discount, and the government paid the difference.

The subsidy costs about $10 billion last year. The last time the government tried to end the scheme, the move led to protests. Nigeria needs imports because it lacks the refinery capacity necessary to meet domestic demand.

The head of Nigeria's state oil firm NNPC, Mele Kyari, said earlier this month it was ending the swaps - known as Direct Purchase Direct Sale (DSDP) - after years of criticism by civil society groups including the Nigerian Extractive Transparency Initiative for a lack of transparency and corruption.

Kyari said payments would be now made in cash but traders say NNPC is still importing gasoline via swaps for July delivery and has to pay for those cargoes in crude as well as the pending payments for previous months of swaps.

The arrangement has for years involved more than a dozen foreign and local trading consortia and backpayments are expected to continue until at least October 2023, according to the four traders involved in business with NNPC.

NPPC, which claims the government owes it $6 billion for subsidised fuel sales, declined to comment. The government declined to comment. Swaps participants including Vitol, Mercuria, BP and TotalEnergies (TTEF.PA) also declined to comment.

"Swaps will ultimately stop but not yet. We are getting our swaps crude cargo in October at the earliest," one major player said.

NNPC had made a rare cash payment in May to some partners of around $200 million, two trading sources said, but no further payment has taken place since amid the government's cash struggles.

Nigeria's falling oil production has exacerbated the country's fiscal problems, because it reduces the revenue that could be used to repay debt.

Nigeria used to produce 1.8 million barrels per day of crude but output has fallen in recent years to as little as 1.1 million during due to lack of investment.
 

PRIVATE IMPORTERS

Paying for fuel deliveries with crude cargoes means there is less crude for Nigeria and NNPC's to export, and so less revenue.

NNPC's contribution to state coffers went from a peak of more than $30 billion a year in 2011 to zero in 2022 as it retained revenues to cover gasoline sale losses.

International monetary experts have long suggested Nigeria remove fuel subsidies and liberalise its foreign exchange to address its fiscal crisis.

In recent years, Nigeria's central bank kept the naira fixed at an artificially high rate that gradually rose from 200 to 450 naira to the dollar that only a few players, including the NNPC, could access. That shut out potential private gasoline importers from the market.

President Tinubu allowed the naira to fall steeply in recent weeks, and eliminated preferential naira rates, a move that means all potential importers get the same forex costs and could compete in fuel imports.

But the naira volatility, which makes it tough to calculate potential profits, and uncertainty over whether firms will be able to get money out of the country due to continued dollar shortages, has for now deterred private firms from importing fuel.

Besides private importers, Nigeria will also depend on businessman Aliko Dangote's refinery to cover fuel demand in the future. Nigeria's first major oil plant is unlikely to start full-scale operations before next year.

By Julia Payne, Reuters

Black market collapses in Nigeria due to fuel subsidy removal

Things have been topsy turvy lately on the roadsides of West African nations where cheap contraband petrol from Nigeria has abruptly doubled in price, upending an informal sector that is central to the region's economic activity.

Since Nigeria scrapped a state fuel subsidy on May 31, black market fuel vendors and commercial drivers in Cameroon, Benin and Togo who were heavily reliant on petrol smuggled from Nigeria have seen their businesses collapse.

With supplies dwindling, queues have been forming at official petrol stations, where fuel is now competitively priced.

In Garoua, a town in northwest Cameroon about 60 km (37 miles) east of the Nigerian border, a litre of petrol on the black market used to sell for about 300 CFA francs ($0.48). Now the minimum is 600 CFA francs, vendors said.

"Supply has become scarce and customers think we're ripping them off with this high price, yet it's from Nigeria that prices have soared," said Perevet Dieudonne, a black market seller.

The knock-on effects on motorcycle-taxis, a form of public transport ubiquitous in West Africa, include conflict between riders who often live hand-to-mouth and customers who demand cheap fares no matter what.

Ousmanou Mal Djoulde, a rider in Garoua, said he had been forced to more than double his fares. Many customers were refusing to pay and business was agonisingly slow.

The trade in black market fuel is so central to the local economy that authorities either turn a blind eye or are complicit. A Reuters reporter in Garoua saw a Cameroonian customs officer sitting on a motorcycle-taxi that was being refuelled with smuggled Nigerian petrol.
 

RAMPANT SMUGGLING

There is no reliable data on the amount of fuel that is smuggled from Nigeria.

The head of Nigeria's state-controlled oil firm NNPC, the sole supplier, said early this month 66 million litres of petrol left its depots daily but could not say how much was consumed locally, though he admitted smuggling was rampant.

Independent energy experts and Nigeria's Dangote Petroleum Refinery - which expects to start producing petrol from early August to alleviate chronic fuel shortages - put Nigeria's total daily consumption below 40 million litres.

In Benin and Togo, small nations to the west of Nigeria, contraband fuel vendors have lost both supplies and customers while formerly sleepy official petrol stations are suddenly busy.

At Hilacondji, a border crossing between Togo and Benin, some black market fuel stalls were shut, while at others vendors waited among rows of empty plastic jerricans for potential deliveries.

"While we wait for the situation to improve, some have gone into fishing or other small businesses," said Ayi Hilla, who had been making a living from selling contraband fuel for 10 years but was now focusing on running a small roadside bar.

Some informal fuel depots were being demolished, and men who used to work there unloading and carrying petrol were now unemployed.

More than 80% of employment in Africa is informal, according to the United Nations, making the informal sector a key driver of economic activity.

In Cotonou, the commercial capital of Benin which is about 60 km from Nigeria, queues have been building up at official petrol stations and some have been unable to meet the sudden surge in demand, especially from "zemidjan", the local word for motorcycle-taxis.

"Before, we were selling about 2,000 litres per day, but now we're selling up to 7,000 litres per day," said a worker at the JNP fuel station who gave his first name, Janvier. He had just turned away four customers because supplies had run out.

"The zemidjan-men are even fighting to get served," said Janvier.

By Desire Danga Essigue, Reuters

President Tinubu says Nigeria needs quick US funding for energy transition

Nigeria's President Bola Tinubu said on Monday the United States should help with more funding to help Africa's leading oil producer accelerate its energy transition plans as he pledged to meet the country's climate change goals.

Oil remains Nigeria's biggest foreign exchange earner and like many African nations, Nigeria argues that it still needs to exploit its hydrocarbons to help provide power to millions of citizens without electricity.

In a meeting with U.S. Assistant Secretary of State, Bureau of Energy Resources, Geoffrey Praytt, Nigeria's president said the U.S. should speed up funding to help the West African nation achieve its energy transition goals.

"There are bottlenecks that must be unbottled in terms of how the U.S. bureaucracy responds to our needs. Help must be given when it is needed. Please take it home that we need help and very quickly too," Tinubu said.

"I want to assure you that Nigeria will honour her obligations on climate change and renewables," he said.

Nigeria's previous junior petroleum minister told U.S. climate envoy John Kerry last September that there was "some moral basis" for Nigeria to get funding from rich nations to meet its climate change goals.

Under Tinubu's economic plans, Nigeria would ramp up oil production to 4 million barrels per day, from an average 1.4 million bpd, which has raised questions on whether the country is still committed to its climate change goals.

By Felix Onuah, Reuters

Eight-week timeline to agree minimum wage with unions in Nigeria

Nigeria's main labour unions and the government on Monday set an eight-week timeline to finalise an agreement to raise the minimum wage to help cushion the impact of high fuel prices after the removal of a popular but costly petrol subsidy.

The Nigeria Labour Congress and the Trade Union Congress (TUC) had threatened to strike after fuel prices tripled following President Bola Tinubu's decision to scrap the subsidy.

Talks with the unions are one of the first challenges the new administration faces as it pushes forward with a raft of economic reforms.

The parties agreed to set up work groups whose terms of reference will be agreed later on Tuesday with some expected to start submitting their reports next week.

"Both parties went through the list (of demands) and we ticked off the viable ones which are now broken into three categories; those that can be given immediate attention, those that can be achieved in the medium term, and long term," said Dele Alake, a spokesman for the president, said.

TUC President Festus Osifo said the process would be completed in eight weeks.

"Everything must be rolled out within that time, (it is) not something that we are going to leave endlessly," he said.

The parties will reconvene on June 26.

Tinubu, who took office last month, is embarking on Nigeria's biggest reforms in decades, seeking to tackle low growth, high debt burden, rising inflation and mounting insecurity in Africa's largest economy.

In 2012, a wave of strikes and protests ensued when the government tried to end the subsidy, with authorities eventually backtracking. Tinubu, then in the opposition, was among those who opposed the measure.

By Camilus Eboh, Reuters

Video - President bola Tinubu on a mission to change Nigeria

Less than a month into his tenure, President Bola Tinubu has begun implementing a raft of reforms long sought by bankers, economists and multilateral lenders in order to revive Africa's biggest economy. The radical changes include removing a fuel subsidy that cost the state 10 billion U.S. dollars annually.

CGTN

President Tinubu defends end to fuel subsidy

Nigerian President Bola Tinubu on Wednesday defended the West African nation’s decision last week to stop subsidizing fuel, a move that has pushed up prices for transportation and commodities.

Tinubu appealed for patience as millions of citizens face additional economic hardship. The money saved by ending the decades-old subsidy will help the government’s efforts to fight poverty and implement other initiatives, he told governors in a meeting in Nigeria’s capital city, Abuja.

“We can see the effects of poverty on the faces of our people. Poverty is not hereditary, it is from society. Our position is to eliminate poverty,’’ a statement from the Nigerian presidency quoted Tinubu as saying.

The governors supported the subsidy’s removal and promised to work together in implementing it, the presidency’s statement said.

Though Nigeria is an oil-producing nation, it depends on imported refined petroleum products, and the government has subsidized the cost for decades.

But with oil revenues dwindling amid chronic theft and decreasing foreign investment, the government said the fuel subsidies are no longer economically sustainable. It budgeted 4.4 trillion naira ($9.5 billion) for the subsidies in 2022, far more than for education, health care and infrastructure combined.

Analysts, however, faulted the government’s decision to withdraw the subsidy without incentives in place, especially at a time when many Nigerians already struggle to cope with record high unemployment and poverty.

Inflation is at an 18-year high. Unions have threatened strike in protest of the subsidy decision.

Nigeria’s states have begun to adopt various measures seeking to assist citizens, especially workers commuting to work daily. Edo and Kwara states this week cut the work week from five days to three. Other states said Wednesday they are considering such measures as increasing the minimum wage of 30,000 naira ($65).

In Abuja and other parts of Nigeria, The Associated Press found businesses struggling from having to spend more money on fuel for generators. As many as 46% of Nigeria’s people do not have access to electricity, the World Bank says.

In Kano state, the economic hub of northern Nigeria, Mahmud Mudi, a taxi driver, said he had to halt his transport business because he was losing money due to higher gasoline prices.

“The situation is unbearable,” Mudi said. “As a family man, the already unfriendly economy has been worsened by this removal of fuel subsidy. I have had to suspend my taxi operations and rely on divine intervention.”

Rafi’atu Audi, a government employee in the state, said it was difficult to commute to work daily because of the sharp increase in transportation costs.

“Transport fares have shot up, but our salaries remain the same,” said Audi. “It’s painful (and) I cannot bear the costs anymore.”

By Chinedu Asadu, AP

Related stories: Main union in Nigeria to suspend strike over petrol subsidy

The aftermath of fuel subsidy removal announcement in Nigeria

Main union in Nigeria to suspend strike over petrol subsidy

Nigeria's main labour union agreed after meeting with the government on Monday night to suspend a planned indefinite strike to protest the removal of a popular decades-old petrol subsidy, a signed resolution of the agreement showed.

The government had obtained a court injunction stopping Nigeria Labour Congress (NLC) from embarking on the strike from June 7, after petrol prices nearly tripled following the subsidy removal last week. Trade Union Congress (TUC) was also cited although it had not yet called for a strike.

On taking office a week ago, President Bola Tinubu immediately scrapped the costly subsidy, which began in the 1970s, causing an uproar from unions.

In 2012, a wave of strikes ensued when Nigeria tried to introduce a similar measure, with authorities eventually reinstating some subsidies. Tinubu, then in the opposition, was among those who opposed ending the subsidies.

A meeting between government representatives and NLC and TUC leaders agreed on Monday that the NLC would "suspend the notice to strike forthwith to enable further consultations."

NLC's executive is expected to meet on Tuesday to approve the agreement with government.

The parties would continue discussions on the union demands, including the upgrade of state-owned refineries so they can produce petrol locally to keep prices low.

Another meeting would be held on June 19 to discuss how to implement any agreements.

TUC, in a statement on Monday, issued a raft of demands to the government, including a rise in the monthly minimum wage to 200,000 naira (433.79) from 30,000 naira with effect from this month and that the new wage should not be taxed.

Tinubu said last week Nigeria needed to review its minimum wage but did not say to what level.

By Felix Onuah, Reuters

The aftermath of fuel subsidy removal announcement in Nigeria

The scrapping of oil subsidies in Nigeria by President Bola Tinubu has ushered in critical changes that will shake the country's economy. The declaration has seen pump prices go up in just under 48 hours with analysts saying that it will trigger a nearly 200 percent rise in petrol prices.

CGTN

Video - Motorists stockpile petroleum products amid possible subsidy removal in Nigeria

Nigerian cities have been hit by long queues of motorists stocking up on petroleum products, President Bola Tinubu announced that fuel subsidies would be abolished.

CGTN

President Tinubu fuel subsidy remarks causes chaos in Nigeria

 

 

 

 

 

 

An off-the-cuff remark by Nigeria's new president during his inaugural speech caused chaos with snaking queues across the country at petrol stations.

After he had been sworn in on Monday, Bola Tinubu took his eyes off the teleprompter during his address to say: "The fuel subsidy is gone."

He was referring to a decades-long subsidy that has kept down the price of petroleum products.

The 71-year-old politician gave no timeframe or any more details about what is a major policy move. When a president last tried to remove the subsidy 11 years ago, protests erupted.

Within hours of Mr Tinubu's first address, hundreds of people had poured on to the streets, either in their cars or on foot with yellow jerrycans, to grab what they believed to be the last drops of fuel to be sold at a government-fixed price.

But only a few were lucky - many filling stations stopped selling altogether, while others unilaterally increased prices by more than 200%, triggering chaos and an artificial scarcity.

By the time the president's team clarified that the scrapping of the subsidy would not come into effect until the end of June - in line with the outgoing administration's budget - it was too late to stop the panic.

By Wednesday, even the state-owned oil company had said it would be raising the price of petrol.

Transport fares have already shot up, commuters are stranded at bus stops and the powerful labour union is now readying itself for a confrontation with the new government.

"By his insensitive decision, President Tinubu on his inauguration day brought tears and sorrow to millions of Nigerians instead of hope," Nigeria Labour Congress (NLC) leader Joe Ajaero said in a statement.

Despite its oil riches, Nigeria is unable to refine crude locally to meet demands.

The four state-owned refineries are moribund, forcing the country to import refined petroleum products which are then sold at a price fixed by the government.

So while people in the UK and Ghana, for example, were forking out £1.44 ($1.80) or 14 cedis ($1.24) respectively for a litre of petrol in May, Nigerians paid 185 naira ($0.40) - despite all three countries buying it from the same international market.

This has been the practice in Nigeria since the 1970s and most residents have grown up insulated from paying the actual price of petrol.

But Mr Tinubu says Nigeria can no longer do this because of dwindling revenue: the government has already set aside $7bn to subsidise fuel for the first six months of this year.

This amounts to 15% of the budget, more than the combined allocations for education (8.2%) and health (5.3%).

Subsidies are not necessarily bad. Many countries offer them in sectors ranging from agriculture to electricity in order to keep costs down for citizens.

But of major concern to Nigerians is corruption. Government agencies give conflicting figures for the amount of fuel imported, while dubious sellers have been known to divert the fuel to nearby countries to get higher rates.

Ironically, President Tinubu was at the head of the resistance in 2012 when a government last tried to end the subsidy.

He wrote then that the government had "tossed the people into the depths of the midnight sea", in a blistering attack on the policy, which was subsequently reversed.

Yet there is more of an acceptance now that the subsidy should be scrapped to free up money for essential public services like transport, health and education.

Analysts expect fuel to sell from anywhere between 250 naira and 350 naira after the current upheavals.

The increase may not seem huge, but it is likely to have far-reaching repercussions in a country where one in three people are unemployed, inflation is at a record 22% and 96 million live below the poverty line of $1.90 per day.

The situation is made worse by the fact that economy is run on thousands of fuel-sucking generators that power businesses, from barbershops to corporate skyscrapers, because of a lack of electricity.

Nigerians are already spending more than 60% of their income on food and transport. With the minimum wage stuck at $64 a month, many are fearing that they will be further impoverished.

"It is not sustainable," muttered one man at a petrol station in the capital, Abuja, after filling the tank of his SUV.

Mr Tinubu's announcement was not preceded by the usual talks with the unions to find common-ground.

In late 2021 when the last government toyed with the idea, it proposed a monthly cash advance of 5,000 naira to poor Nigerians to cover transport fares.

Many struggling Nigerians, used to seeing politicians mismanage the country's oil wealth, fear they may already be victims of a profiteering racket.

They are questioning why the pump price has already increased at both private and state-owned filling stations for what is likely to be older and cheaper stock.

They also wonder what will happen to the money the government has set aside to subsidise fuel for the month of June. Will it disappear or will it be used for their benefit?

There is a feeling that politicians want the people to make sacrifices without making any of their own.

"Had the president also reeled out cost-cutting measures by the government, such as selling a jet from the presidential fleet or reducing Aso Rock's [a reference to the presidential office] budget on refreshments, the message might have been better received," said another man at the Abuja petrol station.

It was also not the sort of first-day pronouncement many were expecting from a president who does not have a large dose of goodwill - he was elected by less than 10% of registered voters.

It is unlikely that Mr Tinubu will reverse the policy. Unlike his predecessor, Muhammadu Buhari, who leaned towards welfarism, he favours free market-driven forces.

Many Nigerians wanted Mr Tinubu to hit the ground running, but many wish he had stuck to the script at his inaugural address, which should have mentioned the "phasing out" of the petrol subsidy.

By Nduka Orjinmo, BBC

Related story: Video - Clip from President-elect Bola Tinubu's acceptance speech

Video - Petroleum subsidies to be phased out in Nigeria

Nigerian President Bola Tinubu declared an end to the country’s petroleum subsidy during his inauguration speech on Monday. Tinubu, however, did not elaborate on how the government will deal with the ripple effects of the end of the subsidy and cushion citizens grappling with a high cost of living.

CGTN

Related story: Video - Dangote Refinery in bid to end fuel imports in Nigeria

 

Video - Dangote Refinery in bid to end fuel imports in Nigeria

Africa's largest oil refinery has opened in Nigeria. The $19bn facility will not just meet the country’s petroleum needs but also export surplus to the rest of the continent and beyond. But environmentalists are worried about the effect it is going to have. Al Jazeera's Ahmed Idris reports from Ibeju Lekki, Nigeria.

Al Jazeera

Related stories: Video - Aliko Dangote building world's largest oil refinery in Nigeria

Video - Aljazeera speaks with Africa's richest man Aliko Dangote

 

 

Africa's biggest oil refiner launched in Nigeria

Africa's biggest oil refinery has been opened in Nigeria, where it is hoped it will alleviate chronic fuel shortages.

Nigeria is a major oil producer but most of this is sent abroad while it has to import the refined fuel used in vehicles and elsewhere.

As a result the country often faces chronic fuel shortages.

This is the problem that the $19bn (£15.2bn) refinery, owned by Africa's richest man, Aliko Dangote, is intended to tackle.

"This is a game-changer for the Nigerian people," said President Muhammadu Buhari.

The plant, which is not yet operational, has the capacity to produce about 650,000 barrels of petroleum products a day - more than enough to supply the country's needs. It also includes a power station, deep seaport and fertiliser plant.

Nigeria's existing refineries have been completely shut down for over three years owing to oil theft, pipeline vandalism and structural neglect.

If it works as planned, the plant could make a real change to the lives of Nigerians: "Every time there is fuel scarcity, I don't open my shop because there's no light [electricity] to work and I can't buy fuel for my generator," a young hairdresser from Lagos told the BBC.

At Monday's launch, Mr Dangote outlined his hopes for the refinery: "Our first goal is to ramp up production of the various products to ensure that within this year, we are able to fully satisfy the nation's demand for quality products."

However, it is not clear what impact the plant will have on the price of fuel in a country where retail prices are subsidised. The government says these subsidies will soon be removed - last year they took up at least a quarter of the national budget.

Mr Dangote's plant in Lagos, which took nearly seven years to build, is said to be the world's largest single-train refinery, meaning the plant has one integrated distillery system which can produce a variety of products and petrochemicals, instead of having different units for each type of product.

It is one of the last major projects to be inaugurated by President Buhari, who steps down next week after serving two terms in office.

President Buhari will hand power to Bola Tinubu, who won disputed presidential elections in February.

Oil and gas expert Henry Adigun told the BBC that Monday's launch was "more political than technical".

Nkechi Ogbonna & Cecilia Macaulay, BBC

Related stories: Africa's richest man Aliko Dangote is building the world's largest refinery in Nigeria

Dangote refinery set to be commissioned by the president of Nigeria in 2 weeks

Video - Dangote Refinery in Nigeria nears completion

Video - $12 billion needed by Nigeria to clean up decades-old oil spills

Nigeria says it needs 12 billion dollars to clean up decades-old oil spills in southern Bayelsa state over a 12-year period. The Bayelsa State Oil and Environmental Commission says in a report that it started an investigation in 2019 on the impact of spills and looked at evidence from forensic scientists, blood samples from people in affected areas and company data. 

CGTN

Video - Oil output slumps in Nigeria

Nigeria's oil output slumped in April, which made it lose its status as Africa's largest oil producer to Angola. Data from the organization of Petroleum Exporting Countries indicates the country's oil output declined the most last month among its peers in the Organization, as it dipped below 1 million barrels per day.

CGTN