The Hawilti, a pan-African investment research firm, has predicted that Nigeria could become biggest oil refiner in the region by 2025.
The prediction is coming as a surprise in light of the country’s longstanding struggle with shortage of petroleum products for its population.
According to Hawilti’s recent report titled “Refineries watch Q4 2022”, Africa will witness significant transformations in its fuel supply security in 2023, as West Africa houses the largest refining capacity on the sub-continent, but only 23 per cent of it is currently operational.
The authors argue that the prospect of a new private refinery becoming operational in Nigeria could help redefine the nation’s local refining capacity. “Both the opening of the Dangote refinery and the rehabilitation of state-owned refineries have the potential to make Nigeria Africa’s biggest refining hub by 2025,” the report said.
It further states that the market is also driven by private oil producers and asset developers who are building modular refineries next to oilfields in the Niger Delta.
The Hawilti study also observed that historically, crude theft throughout 2022 has provided additional incentives for field owners to develop refining facilities and monetize their oil themselves instead of injecting it into third-party export pipelines. “2023 could see movement on several of them, including expansion plans at existing facilities,” it said.
The report also notes that the long-awaited Dangote Refinery is finally expected to start production this year and that its commissioning is already sending hopes that it could finally start rebalancing Nigeria’s trade deficit.
On top of that, Nigeria is also working on the rehabilitation of its three state-owned refineries in Port Harcourt, Warri, and Kaduna totaling some 445,000 bpd of refining capacity.