Abuja: Alhaji Aliko Dangote, President of Dangote Group, has expressed concern over the paradox that Africa, despite being a significant exporter of crude oil, imports over 120 million tonnes of refined fuel annually. This statement was made during the inaugural West African Refined Fuel Conference in Abuja, organized by NMDPRA in collaboration with S and P Global Commodity Insights.
According to News Agency of Nigeria, Dangote highlighted the disparity between Africa’s crude production and its refining capacity. The continent produces around seven million barrels of crude daily but consumes about 4.3 million barrels of refined petroleum products per day. However, only 40 percent of this consumption is refined locally, despite Africa’s vast crude production capacity. Most of the refining occurs in Algeria, Egypt, and now Nigeria, with the launch of the Dangote Refinery.
In Sub-Saharan Africa, Dangote stated that there are fewer than three properly functioning refineries, while Europe and Asia refine nearly 95 percent of their total fuel consumption domestically. Despite producing substantial crude oil, Africa imports 120 million tonnes of refined fuel yearly, effectively exporting jobs and importing poverty. He noted this represents a $90 billion market captured by regions with surplus refining capacity.
Dangote clarified that while he supports free trade and international collaboration rooted in fair competition and economic logic, Africa should not export raw crude only to re-import refined products that it can produce locally. He shared the challenges faced in building the Dangote Refinery, the world’s largest single-train facility, which included technical, commercial, and contextual issues.
Despite initial expectations, sourcing crude oil proved unexpectedly difficult. Though Nigeria produces two million barrels per day, they had to negotiate with international traders reselling Nigerian crude at high premiums. Currently, they purchase nine to 10 million barrels of crude monthly from the U.S. and other countries, although NNPC Ltd. has supplied some Nigerian crude since the refinery began production.
Transport also posed serious difficulties, with frequent schedule changes and excessive port charges. Dangote revealed that port charges constituted about 40 percent of total freight costs, nearly two-thirds as much as hiring an entire vessel, including crew, fuel, and insurance.
He also pointed out the fragmented fuel standards across Africa, with each country maintaining different specifications. This lack of harmonization benefits international traders who exploit market differences through arbitrage but hinders local refiners by restricting access to wider regional markets. Dangote called on African regulators to harmonize standards and create a uniform pricing framework across the region.
