Aliko Dangote
By EZEKIEL OBI, Abuja-
President of Dangote Group, Alhaji Aliko Dangote, has expressed concern over Africa’s reliance on importing over 120 million tonnes of refined fuel annually despite its vast crude oil production.
Speaking at the inaugural West African Refined Fuel Conference in Abuja on Tuesday, hosted by the NMDPRA and S&P Global Commodity Insights, he highlighted systemic inefficiencies in the continent’s energy sector.
Dangote noted that Africa produces approximately seven million barrels of crude oil daily but consumes only 4.3 million barrels of refined petroleum products, with just 40% of this refined locally.
“Most of the refining occurs in Algeria, Egypt, and now Nigeria, with the launch of the Dangote Refinery,” he said, adding that Sub-Saharan Africa has fewer than three fully operational refineries. In contrast, he pointed out, “Europe and Asia refine nearly 95 per cent of their total fuel consumption domestically.”
He described Africa’s import of 120 million tonnes of refined fuel as exporting jobs and importing poverty.
“This represents a $90 billion market being captured by regions with surplus refining capacity,” Dangote stated, advocating for local refining to retain economic value.
He clarified his support for free trade but stressed fair competition: “Africa should not export raw crude only to re-import refined products, which it can produce locally.”
Dangote shared challenges faced in building the world’s largest single-train refinery, citing technical, commercial, and logistical hurdles. Sourcing crude oil in Nigeria, a country producing two million barrels daily, was unexpectedly difficult.
“Initially, it seemed logical that crude would be readily available in Nigeria,” he said, but the refinery had to negotiate with international traders reselling Nigerian crude at high premiums.
“Today, we buy nine to 10 million barrels of crude monthly from the U.S. and other countries,” he revealed, thanking NNPC Ltd. for supplying some local crude.
Logistical issues, particularly transport, posed further challenges.
“Port charges alone made up about 40 per cent of total freight costs,” Dangote disclosed, noting that these fees were nearly two-thirds the cost of hiring an entire vessel, including crew, fuel, and insurance. He also criticized Africa’s fragmented fuel standards, which hinder regional trade.
“The fuel produced for Nigeria cannot be sold in Cameroon, Ghana, or Togo — even though we all drive similar vehicles,” he explained, adding that this fragmentation benefits international traders exploiting market differences through arbitrage.
Dangote called for harmonized fuel standards and a uniform pricing framework across Africa to boost efficiency and regional market access for local refiners.
He urged African governments to protect domestic refineries, as seen in the U.S., Canada, and the EU, to strengthen the continent’s energy independence.
