Dangote Refinery Will Be Subsidy Neutral - Africa’s premier report on the oil, gas and energy landscape.

Dangote Refinery Will Be Subsidy Neutral

The 650,000BOPD Dangote Crude Oil Refinery, currently under construction, will sell its products to wholesale suppliers, not retailers, according to officials of the Dangote Industries. If the price of its gasoline is higher than the subsidized price, the buyers pay Dangote Refinery in full and then get the subsidy from government.

“We will be subsidy neutral”, officials explained on a recent tour of the 2,135 Hectare refinery grounds by Africa Oil+Gas Report.

Nigeria moved towards full deregulation of the downstream of its oil and gas industry in the week of May 9, 2016, with the government announcing the removal of subsidy on gasoline, but the country’s influential trade union, the Nigerian Labour Congress (NLC) has opposed the removal, threatening to shut down the economy if the action was not rescinded.

Dangote Industries expects to buy crude at international prices once the plant is commissioned, expectedly, in 2019. Devakumar Edwin, Group Executive Director of Dangote Industries Limited, who is overseeing the construction of the refinery, the 3MMTPA fertiliser plant and the Petrochemicals plant, all co-located in the 2,700Hectare land in the Lekki Free Trade Zone in the east of Lagos, said that the refinery will be able to supply the entire gasoline requirements of the country when it is fully operationalized. He acknowledges that there is no consensus on the volume of gasoline in demand, “but whatever it is  we will be able to supply it”

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