* Aliko Dangote would invest up to $8 billion in refinery
* Would almost double Nigeria's refining capacity
* Nigeria relies on imports for 80 pct of fuel needs
(Adds Dangote comments, details of planned refinery,
By Tim Cocks
LAGOS, April 16 Africa's richest man, Aliko
Dangote, plans to invest up to $8 billion to build a Nigerian
oil refinery with a capacity of around 400,000 barrels a day by
late 2016, the tycoon told Reuters on Tuesday, almost doubling
Nigeria's refining capacity.
"This will really help not only Nigeria but sub-Saharan
Africa. There has not been a new refinery for a long time in
sub-Saharan Africa," Dangote said in a telephone interview.
The country currently has the capacity to produce some
445,000 barrels per day among four refineries, but they operate
well below that owing to decades of mismanagement and corruption
in Africa's leading energy producer.
Nigeria, the continent's second-biggest economy, relies on
subsidized imports for 80 percent of its fuel needs. A surge in
domestic capacity would be welcomed by investors in Nigeria, but
it would cut into profits made by European refiners and oil
traders who would lose part of that lucrative market.
Dangote said the country's ability to import fuel would soon
be challenged. "In five years, when our population is over 200
million, we won't have the infrastructure to receive the amount
of fuel we use. It has to be done," he said.
Past efforts to build refineries have often been delayed or
cancelled, but analysts have said Dangote should be able to
build a profitable Nigerian refinery, owing to his past
successes in industry and his strong government connections.
The Dangote Group's cement manufacturing, basic food
processing and other industries have helped lift his personal
fortune to $16.1 billion from $2.1 billion in 2010, according to
the latest Forbes estimate.
Nigeria has two refineries in its main Port Harcourt oil
hub, one in the Niger Delta town of Warri, and one in Kaduna in
the north that serve 170 million people. Not one of them
functions at full capacity.
Analysts have said previous attempts to get refineries going
have been held back by vested interests such as fuel importers
profiting from the status quo. Dangote said this concerned him.
"The people who were supposed to invest in refineries, who
understand the market, are benefiting from there being no
refineries because of the fuel import business," he said. "Some
... are going to try to ... interfere."
Nigeria's government subsidizes fuel imports to keep pump
prices well below the market rate at a cost of billions of
dollars a year. Fuel subsidies are the single biggest item on
the country's budget.
Dangote said making a new refinery run at a profit would
work even if the government failed to scrap the subsidized fuel
price that has deterred others from investing.
"We've done our numbers and the numbers are okay."
(Reporting by Tim Cocks; Editing by Gerald E. McCormick, Toni