Nigeria—a major petroleum products importer—expects to stop importing petroleum products starting in the third quarter of next year, Nigeria’s oil minister Timipre Sylva said on Tuesday, cited by Reuters.

 

A refurbished refinery in Port Harcourt in the Niger Delta is expected to be producing 60,000 bpd of refined crude oil per day by the end of next month, and the new Dangote refinery is expected to come online in the first quarter of next year.

Nigeria has been mostly unable to take advantage of high crude oil prices because it swaps crude oil for refined products—which also saw a huge price jump this year.

Nigeria, Africa’s largest oil producer just two years ago, has been surpassed by Libya and Angola and has a considerable breakeven cost for producing crude. As crude oil prices rose, the gasoline subsidy that Nigeria kicks in ended up costing Nigeria ten times what it had originally budgeted this year--$9.6 billion.

What this means is that Nigeria swaps this high-priced crude for gasoline, which it sells at a loss. On top of that, Nigeria imports nearly all of the gasoline it consumes--$43 billion’s worth in 2020.

But that could be about to change. “We’re expecting that we will actually be exiting the importation of petroleum products from maybe about third quarter next year if I was to give it a longer timeframe, but I believe that even before the third quarter next year,” Sylva said.

Nigeria’s four crude oil refineries, with a combined nameplate capacity of 445,000 barrels per day, would be enough to meet demand, but the refineries are in a state of disrepair. The Port Harcourt refurbishment, at a cost of $1.5 billion, and the new Dangote refinery—if successfully completed on schedule—will go a long way to alleviating the burden of Nigeria’s costly fuel imports.