Why Nigerians are praying for the success of Dangote refinery

A few months ago, a prayer gathering was held in Kano, a deeply religious city in northern Nigeria. The purpose of this event was to pray for the success of a major new oil refinery, set to begin producing petrol next month.

Aliko Dangote

Praying for an industrial facility might seem unusual, but many Nigerians are optimistic that the Dangote Petroleum Refinery will significantly boost petrol availability and reduce prices. This $19 billion (£15 billion) refinery, located near Lagos on Nigeria’s southern coast, spans almost 4,000 football pitches.

Construction of the refinery began in 2016. It started producing diesel and aviation fuel earlier this year, with petrol production slated to commence soon. The facility is expected to end Nigeria’s reliance on imported fuels.

Despite being Africa’s largest crude oil producer and the world’s 15th largest, Nigeria’s existing government-owned refineries are non-operational. The Dangote refinery, privately owned by Africa’s richest man, Aliko Dangote, represents a significant step forward. Born in Kano, the 67-year-old Dangote has a net worth of $12.6 billion (£9.7 billion) according to Forbes. His company, Dangote Group, initially made its fortune in cement and sugar before embarking on this ambitious refinery project.

The recent prayer session in Kano was organized by Lado Danladi, a local shop owner, and took place at a nearby mosque with participation from neighboring shopkeepers. Danladi, who runs a small phone charging shop, relies on a generator due to the lack of stable electricity. He spends $5 daily on petrol and hopes the refinery’s success will ease fuel shortages and reduce costs, benefiting small businesses like his.

His fellow shop owners, including a meat seller and a drinks vendor, share similar concerns about the high cost of fuel for their generators. For decades, Nigerians enjoyed subsidized petrol prices, but incoming President Bola Tinubu ended these subsidies last year, causing prices to quadruple. This spring and summer, petrol shortages led to long queues at petrol stations, and the state-owned Nigerian National Petroleum Company warned against panic buying.

Corruption exacerbates the situation; Nigeria ranks 145th out of 180 countries on Transparency International's corruption index. The Dangote refinery aims to produce 650,000 barrels of fuel per day at full capacity. Devakumar Edwin, vice president of Dangote Group, stated that the refinery would produce 500,000 barrels per day by the end of August, surpassing Nigeria’s daily usage of 480,000 barrels, with plans to export the surplus.

Abubakar Maigandi, president of Nigeria’s independent petrol marketers, believes the refinery will resolve longstanding logistics issues and reduce costs by eliminating importation expenses. He hopes Dangote refinery will deal directly with marketers, avoiding complications from middlemen.

Aliko Dangote mentioned in a 21 July interview that he might sell the refinery to the state-owned Nigerian National Petroleum Company in the future, as some oppose private ownership of such a critical facility. Nigerian public affairs analyst Sani Bala emphasizes the need for the refinery to significantly reduce petrol prices to have a nationwide impact. He also warns against relying solely on the Dangote refinery, suggesting the need for another operational refinery and raising environmental concerns about emissions and potential impacts on nearby communities.

Last year, a dialogue was held to address local concerns, with youth leader Arepo Azeez citing issues such as vibrations and potential oil spills. Despite these concerns, Lado Danladi in Kano remains hopeful for cheaper petrol and the positive changes the Dangote refinery could bring.