Dangote Refinery agog as Ghana set to import petroleum from Nigeria

The chairman of Ghana’s National Petroleum Authority, Dr. Mustapha Abdul-Hamid has revealed plans to begin the importation of petroleum products from Nigeria’s Dangote Oil Refinery once it reaches maximum production capacity.

Abdul-Hamid revealed the plans during the Oil Trading Logistics (OTL) Africa Downstream Oil Conference in Lagos, saying that the move would reduce the country’s $400 million monthly fuel imports from Europe.

According to the Ghana’s Petroleum Authority, the move is expected to enhance Ghana’s energy security and strengthen bilateral relations with Nigeria.

Mustapha emphasized that importing petroleum products from Nigeria’s Dangote Oil Refinery will not only reduce Ghana’s reliance on European fuel imports but also significantly cut costs for the country and bolster regional trade in Africa.

He also stated, “sourcing fuel from Nigeria is expected to significantly reduce Ghana’s expenses, primarily due to lower freight costs.”

The chairman noted that the adoption of a pan-African currency in the future could potentially reduce dependence on the United States dollar for transactions, thereby alleviating currency exchange pressures across African markets.

“Once the refinery reaches its targeted capacity of 650,000 barrels per day, Nigeria’s domestic market will be unable to absorb the entire production volume.”

“This surplus presents an opportunity for Ghana to import petroleum products from Nigeria, replacing current imports from Rotterdam and potentially leading to reduced prices,” Dr. Abdul-Hamid stated.

As previously reported by the Dangote Refinery initiated the supply of Premium Motor Spirit (PMS) or petrol to Nigeria’s domestic market effective September 15, 2024.

“The Dangote Refinery is projected to reach near-full capacity by the end of 2024 and achieve full operational status in early 2025,” Daily Nigerian reported.

Ghana’s National Petroleum Authority

Ghana’s National Petroleum Authority (NPA) is the main regulatory body for the country’s petroleum downstream industry.

It was established by an Act of Parliament in 2005, and ensures the industry remains efficient, profitable, and fair, while also protecting consumer interests.

Key Objectives

The authority regulates and oversees the petroleum downstream industry, monitors and ensures efficiency, growth, and stakeholder satisfaction, and protects consumer interests and prevents malpractices.

Departments

The NPA has several technical departments to achieve these objectives, including the Licensing Department which grants licenses and permits to Petroleum Service Providers (PSPs).

It has the IM & HSSE which monitors design, construction, and operations of PSPs, focusing on health, safety, and environmental standards.

Quality Assurance is another department which checks and controls malpractices affecting product quality and government revenue.

Besides, the Economic Regulation and Planning department monitors supply and consumption of petroleum products.

Headquarter

The NPA is headquartered in Accra, with regional offices across Ghana, including Bolga, Bono, Wa, Tamale, Takoradi, Kumasi, Koforidua, Ho, and Cape Coast.

Dangote Refinery

The Dangote Refinery is a mega petroleum refinery located in Lekki, Lagos State, Nigeria. It’s owned by the Dangote Group, a conglomerate founded by Aliko Dangote, Africa’s richest man. Its products are petrol, diesel, jet fuel, kerosene, and fertilizer.

Capacity

The refinery has the capacity of 65,000 barrels per day (BPD), with its investment of $15 billion.

Dangote Refinery aims to reduce Nigeria’s dependence on imported petroleum products, and meet local demand for petroleum products

Also, it aims to export petroleum products to neighboring countries, create employment opportunities and boost Nigeria’s economy.

Technology and Partnerships

The refinery was built in partnership with international companies like Honeywell, UOP and Siemens.

It utilizes cutting-edge technology for efficient refining and environmental sustainability.

Impacts

The Aliko Group owned refinery faces challenges like funding and financing, construction delays, environmental concerns, competition from existing refineries and regulatory challenges.

Recent Developments

Dangote Refinery was inaugurated on May 22, 2023, and the Nigerian National Petroleum Corporation (NNPC) has signed an agreement to buy 20% stake in the refinery.

It also plans to list the refinery on Nigerian Stock Exchange (NSE).

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