Aliko Dangote, president/chief executive officer of Dangote Industries Limited, said Africa loses an estimated $90 billion annually to the importation of substandard petroleum products due to the continent’s inadequate domestic refining capacity.
Speaking at the West African Refined Fuel Conference in Abuja on Tuesday, Dangote warned that the continent’s reliance on fuel imports not only bleeds its economy but also exposes it to the influx of cheap, often substandard petroleum products rejected in Europe and North America.
The conference, jointly organised by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and S&P Global Commodity Insights, brought together regulators, industry leaders, and policymakers to chart a sustainable future for West Africa’s petroleum market.
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Dangote noted that while Africa produces about seven million barrels of crude oil per day, only 40 percent of its 4.3 million barrels daily consumption of refined products is processed locally — a stark contrast to Europe and Asia, which refine over 95 percent of their consumption.
“So, while we produce plenty of crude, we still import over 120 million tonnes of refined petroleum products each year, effectively exporting jobs and importing poverty into our continent. That’s a $90 billion market opportunity we’re handing over annually,” Dangote said.
He stressed that it is economically illogical for Africa to export crude and re-import refined products which it is capable of producing, noting that this practice deprives the continent of jobs, investment, and industrial growth.
Sharing insights on the complexities of building the Dangote Refinery, he recounted overcoming technical, commercial, and logistical challenges, including land reclamation, infrastructural development, and regulatory hurdles.
At its peak, the project engaged over 67,000 workers, with 50,000 of them Nigerians, and required the construction of a dedicated seaport and the world’s largest granite quarry. Despite the technical success, Dangote lamented persistent challenges such as foreign exchange volatility and difficulties in sourcing Nigerian crude at competitive terms.
“Rather than buying crude directly from local producers, we’ve often had to negotiate with international traders who buy Nigerian crude and sell to us at a premium. Ironically, we now import millions of barrels monthly from the US and other countries,” he disclosed.
Dangote also decried high port and regulatory charges in Nigeria, which inflate logistics costs to levels higher than what refiners in Asia and India pay. He criticised the fragmented fuel standards across African countries, describing them as barriers that discourage intra-African trade in refined products.
He urged African governments to harmonize fuel specifications and adopt policies that protect domestic refiners, similar to measures taken by the US, Canada, and the EU.
“We are now facing increasing dumping of cheap, often toxic, petroleum products — some blended to standards that would never be allowed in Europe or North America,” he warned.
In his remarks, Farouk Ahmed, chief executive officer of NMDPRA, noted that despite being a significant producer of hydrocarbon resources, an important consumer of refined petroleum products and a growing refining hub, West Africa continues to depend on posted prices of global reference markets such as Northwest Europe (NWE), US Gulf Coast, Mediterranean, Singapore, Arab Gulf for all its trading activities.
He explained that while these benchmarks are globally accepted, they often do not reflect the unique supply chain peculiarities, market dynamics, and economic realities of the African continent.
“A regional pricing benchmark that promotes price discovery, transparency, deepened market development and enhanced availability of energy has then become a strategic objective that requires the collaborative action of all the stakeholders that are major players in this market.
“Establishing a regional pricing reference point would facilitate: growth of trading of petroleum products in the region, establishment of additional storage and supply infrastructures
to accommodate the growing volumes of trading activities, real-time pricing data that is reflective of the peculiarities of the West African market fundamentals,” he said.
Ahmed noted that the regional supply of fuels in West Africa has grown through improved refining capacities in Nigeria, Ghana, Niger, Senegal and Cote D’Ivoire, which currently stands at 1.335 million barrels per day.
“Our 2025 statistical data for fuel supply in the West African region reveals that 2.05 million MT per month of Gasoline is being traded, consisting of 1.44 million MT (69 percent) imports and 0.61 million MT (31 percent) refinery contribution from the region.”
In his remarks, Ikeagwuonu Ugochinyere, chairman of the House Committee on Petroleum Resources (Downstream), cautioned against attempts to dissolve the boards of the NMDPRA and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), saying such moves threaten investor confidence and undermine the Petroleum Industry Act (PIA).
The lawmaker praised NMDPRA’s achievements, including attracting $1.2 billion in modular refinery investments, reducing fuel smuggling by 35 percent, rolling out an Automated Downstream System (ADS), and boosting compressed natural gas conversion capacity.
International traders frustrating local refineries, says Dangote
Meanwhile, Dangote also said that international traders are deliberately frustrating the establishment of new refineries and the efficient operation of existing ones in Africa – to protect their own interests.
According to Dangote, international traders maintain the offshore Lomé floating market, where over one million tonnes of petroleum products are stored in vessels offshore and sold to African countries at inflated prices.
Dangote argued that building a refinery threatens powerful vested interests entrenched within the petroleum value chain across many African nations.
He noted that petroleum products were sold at inflated prices due to the lack of local refining capacity, but prices plummeted once the Dangote Refinery became operational.
“When you build a refinery and disrupt that system, you are not just innovating—you are threatening powerful interests that will seriously fight back,” he said, adding, “Without political support I don’t think any new large refinery will be built any time soon.”
Dangote further stated that the offshore Lomé floating market exists solely to prevent any refinery from operating in sub-Saharan Africa.
“But make no mistakes, those who profit from this system will do everything they can to prevent other refineries from emerging. The whole essence of Lomé is to ensure that no refinery operates in sub-Saharan Africa. In fact, I don’t see any new major refining project succeeding with the offshore Lomé market in existence,” he warned.
