MD/CEO of Dangote Refinery, David Bird, has urged the Nigerian government to prioritise national interest by ensuring that the country’s domestic refining industry receives adequate and consistent crude oil supply amid global market disruptions.
Speaking during a media briefing on Monday, Bird noted that the global oil market is facing significant supply constraints following disruptions in the Middle East, which accounts for roughly 20 per cent of global crude supply.
According to him, while the scale of the disruption is substantial, many countries are already adopting policies designed to protect their domestic economies, urging Nigeria to take a similar approach.
He said, “The Middle East is 20% of the crude supply. That is a massive curtailment of market supply and Nigeria, producing one and a half, growing a bit more hopefully, if you put one and a half, that’s really between 1% and 2% of the total total supply. So I think the opportunity to impact global dynamics right now where there’s a curtailment of 20%, with Nigeria’s ability to grow from a low base of one and a half percent of total supply is minimal.
“However, all countries are being very self-interested. China has banned exports. In fact, many countries with a refining industry have banned exports. Thailand, Vietnam, etc. Other countries that have a strategic reserve are releasing their strategic reserve. But bear in mind, they won’t be releasing that on the open market. They’ll be releasing those strategic reserves to ensure that their domestic industry gets preference. That is the role that the Nigerian government should be considering right now, self-interest.
“What does that mean for Nigeria? That means ensuring that the domestic refining industry in Nigeria gets access to crude, abundant access to crude, the right grades of crude and prioritise the domestic industry.
“I would also advocate that all government agencies look at their contribution to taking cost out of the value chain. We still feel there’s a lot of regulatory impost at every step of our processing. We have 47 different government agencies that we deal with and we incur costs from.
“I think there’s a role for every government agency to really look at what their contribution is to take cost out of the supply chain. But most importantly, the role of Nigeria is to look after Nigerians and that would be securing crude supply to Nigeria’s domestic refinery.”
Melissa Enoch.
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