Aliko Dangote, President of the Dangote Group, has underscored the urgent need for Nigeria to stop mortgaging crude oil.
Speaking at a summit organised by the Crude Oil Refinery Owners Association of Nigeria(CORAN) in Lagos, he lamented that Nigeria and other African countries are depleting their future oil earnings, unlike countries like Norway, which invest their oil revenues in future funds.
Dangote stressed the importance of Nigeria discontinuing the use of crude oil as collateral to ensure a consistent feedstock supply for local refineries.
The Nigerian National Petroleum Company Limited (NNPC) has agreed to provide 272,500 barrels of crude oil daily through various crude-for-loan agreements totalling $8.86 billion.
This commitment suggests that about 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, emphasised the need to give precedence to domestic crude supply obligations and increase crude production capacity to meet refinery demand.
He disclosed that the Dangote refinery, with a capacity of 650,000 barrels per day, was constructed without any government incentives. However, he underscored the significance of investor incentives in turning Nigeria into a regional refining hub.
Dangote also pointed out the forthcoming arrival of 1.8 million barrels of new refining capacity in Kuwait, China, and Bahrain over the next three years.