Dangote refinery : how Nigeria’s refining ambitions impact trade flows
SONAR|HES-SO
- Plug, Grégoire
- Noller, Julie (Degree supervisor)
- Genève : Haute école de gestion de Genève
85 p.
Bachelor of Science HES-SO in International Business Management: Haute école de gestion de Genève, 2024
English
For the last several decades, refining in Nigeria has been chaotic and ineffective. The country was forced to source petroleum products by crude oil swaps through costly schemes. In 2013, Aliko Dangote, the richest man in Africa, announced the beginning of the construction of the largest single train refinery complex in Africa, to be located near Lagos. The economic impact has been presented repeatedly through research and articles. But the financial and physical flow of goods has been omitted.
Motivated by this gap of knowledge, this study was formed with the question in mind “How will Nigeria’s refining ambitions impact trade flow?”. Where will the refined product be shipped to once the refinery runs at its capacity? Which countries will need to review their refining capacities because of this newcomer in the industry? There are many questions left unanswered by other research.
Through interviews of commodity traders involved in West Africa and extensive data research, the study shows that Northern Europe refineries are already slowing down their exports to the region, and Nigeria is currently importing less petroleum products than before. The Dangote refinery has been able to produce diesel and price at the pump for domestic consumption fell by 30%. Despite the encouraging results from the early refining stages, secondary units are yet to be running and producing gasoline.
During the interviews, concerns were raised about the financing of the refinery, the infrastructure surrounding the production plant, and the struggle to constantly exit large quantities of products for domestic market. Dangote has exported several of his first cargoes of naphtha and jet fuel, but only time will tell on which market his products will end up; domestically or internationally.
Motivated by this gap of knowledge, this study was formed with the question in mind “How will Nigeria’s refining ambitions impact trade flow?”. Where will the refined product be shipped to once the refinery runs at its capacity? Which countries will need to review their refining capacities because of this newcomer in the industry? There are many questions left unanswered by other research.
Through interviews of commodity traders involved in West Africa and extensive data research, the study shows that Northern Europe refineries are already slowing down their exports to the region, and Nigeria is currently importing less petroleum products than before. The Dangote refinery has been able to produce diesel and price at the pump for domestic consumption fell by 30%. Despite the encouraging results from the early refining stages, secondary units are yet to be running and producing gasoline.
During the interviews, concerns were raised about the financing of the refinery, the infrastructure surrounding the production plant, and the struggle to constantly exit large quantities of products for domestic market. Dangote has exported several of his first cargoes of naphtha and jet fuel, but only time will tell on which market his products will end up; domestically or internationally.
- Language
-
- English
- Classification
- Economics
- Notes
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- Haute école de gestion Genève
- International Business Management
- hesso:hegge
- Persistent URL
- https://folia.unifr.ch/global/documents/330849
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