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Africa’s Losing $90bn Annually to Imported Substandard Fuel, Dangote Laments
Africa has become a destination for cheap, often toxic petroleum products, often blended to substandard levels that would not be permitted in Europe or North America.
This concern was raised by the President/Chief Executive, Dangote Industries Limited, Aliko Dangote, at the ongoing West African Refined Fuel Conference held in Abuja.
The event is the brainchild of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and S&P Global Commodity Insights.
According to Dangote due to the continent’s limited domestic refining capacity, Africa imports over 120 million tonnes of refined petroleum products annually, at a cost of approximately $90 billion.
While appreciating the Management of the Nigerian National Petroleum Company Limited (NNPCL), for making some cargoes of Nigerian crude available to us from start of production to date, he revealed that the company, monthly import between 9-10 million barrels of crude from the United States of America and other countries.
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He said, “As we speak today, we buy 9 – 10 million barrels of crude monthly from US and other countries. I must thank NNPC for making some cargoes of Nigerian crude available to us from start of production to date.”
Dangote further stated that despite producing around 7 million barrels of crude oil per day, Africa only refines about 40% of its 4.3 million barrels daily consumption of refined products domestically. In stark contrast, Europe and Asia refine over 95% of what they consume.
“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 being captured by regions with surplus refining capacity. To put this in perspective: only about 15% of African countries have a GDP greater than $90 billion. We are effectively handing over an entire continent’s economic potential to others—year after year,” he said.
While reaffirming his belief in the power of free markets and international cooperation, Dangote emphasised that trade must be grounded in economic efficiency and comparative advantage — not at the expense of quality or safety standards.
He stressed that, “it defies logic and economic sense for Africa to be exporting raw crude only to re-import refined products—products we are more than capable of producing ourselves, closer to both source and consumption.”
Reflecting on the experience of delivering the world’s largest single-train refinery, Dangote also highlighted a range of challenges faced, including technical, commercial, and contextual hurdles unique to the African landscape.
Africa’s wealthiest man described building refineries such as the Dangote Petroleum Refinery as one of the most capital-intensive and logistically complex industrial facilities ever constructed. The Dangote refinery project, he said, required clearing 2,735 hectares of land (seven times the size of Victoria Island), of which 70% was swampy, requiring the pumping of 65 million cubic metres of sand to stabilise the site and raise it by 1.5 metres, over 250,000 foundation piles, and millions of metres of piping, cabling, and electrical wiring among others.
“At peak, we had over 67,000 people on-site of which 50,000 are Nigerians, coordinating around the clock across hundreds of disciplines and nationalities. Then, of course, came the COVID-19 pandemic which set us back by two years and brought new levels of complexity, disruption, and risk. But we persevered,” he noted.
The refinery also required the construction of a dedicated seaport, as existing Nigerian ports could not handle the size and volume of equipment required. This included over 2,500 pieces of heavy equipment, 330 cranes, and even the establishment of the world’s largest granite quarry, with a production capacity of 10 million tonnes per year.
“In short, we didn’t just build a refinery—we built an entire industrial ecosystem from scratch,” he said.
Despite the refinery’s technical success, Dangote identified significant commercial challenges, particularly exchange rates which have gone from N156/$ at inception to N1,600/$ at completion, and challenges around crude oil sourcing. Although Nigeria is said to produce about 2 million barrels per day, the refinery has struggled to secure crude at competitive terms.
“Rather than buying crude oil directly from Nigerian producers at competitive terms, we found ourselves having to negotiate with international trading companies, who were buying Nigerian crude and reselling it to us—with hefty premiums, of course.
Logistics and regulatory bottlenecks have also taken a toll. Port and regulatory charges reportedly account for 40% of total freight costs, sometimes costing two-thirds as much as chartering the vessel itself.
“Refiners in India, who purchase crude oil from regions even farther away, enjoy lower freight costs than we do right here in West Africa because they are not saddled with exorbitant port charges,” Dangote said.
He added that, in terms of port charges, it is currently more expensive to load a domestic cargo of petroleum products from the Dangote Refinery, as customers pay both at the point of loading and at the point of discharge. In contrast, when they load from Lomé, which competes with them, they pay only at the point of discharge.
Dangote further criticised the lack of harmonised fuel standards across African nations, which creates artificial barriers for regional trade in refined products.
“The fuel we produce for Nigeria cannot be sold in Cameroon or Ghana or Togo, even though we all drive the same vehicles. This lack of harmonisation benefits no one—except, of course, international traders, who thrive on arbitrage. For local refiners like us, it fragments the market and imposes unnecessary inefficiencies.”
Dangote, stating the challenge with diesel production in Africa, noted, “to give one example, the diesel cloud point for Nigeria is 4 degrees. Without going into the technical details, this means that the diesel should work at a temperature of 4 degrees centigrade. Achieving this comes at a cost to us and limits the types of crude we could process. But how many places in Nigeria experience temperatures of 4 degrees? Other African countries have a more reasonable range of 7 to 12 degrees. This is a low hanging fruit which could be addressed by the regulators.”
He also cited the growing influx of discounted, low-quality fuel originating from Russia — blended with Russian crude under price caps and dumped in African markets.
“And to make matters worse, we are now facing increasing dumping of cheap, often toxic, petroleum products—some of which are blended to substandard levels that would never be allowed in Europe or North America,” he said.
Dangote called on African governments to follow the example of the United States, Canada, and the European Union, which have implemented protective measures for domestic refiners.
Optimism over improved domestic refining output and cheaper petroleum products at the Dangote Petroleum Refinery & Petrochemicals (DPRP) now hang in the balance in the face of a 62 percent crude oil supply shortfall.
The $20 billion, 700,000 barrels per day facility, which began operations in 2021, is facing a severe crude supply shortfall of eight cargoes per month.
To operate at optimal capacity, the refinery requires 13 cargoes (ships) of crude monthly as against five cargoes currently being supplied by the Nigerian National Petroleum Company Limited (NNPC Ltd).
This was detailed in a report by the African Energy Council (AEC), which highlighted that the refinery is currently running at a third of its crude oil requirement.
The report lamented that the refinery running at a shortfall is not because the feedstock does not exist in Nigeria, but because the system supplying it has a vested interest in keeping the import window open.
The AEC added that the decision of the DPRP to file a suit against the Federal Government, NNPC Ltd and downstream regulator is less a legal story and more of a governance issue.
“When your mandated crude supplier competes with you in the same market, a shortfall of eight deliveries per month stops being a logistics problem and starts looking like a structural one,”, the report noted.
It added that the Petroleum Industry Act (PIA) 2021 was supposed to settle this.
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Specifically, the AEC noted that Section 317(9) served as an implicit agreement with private investors to refine locally, meet domestic demand, and operate in a context where import competition is effectively limited.
“That compact is now being tested in a Lagos courtroom and the outcome will say far more about Nigeria’s investment credibility than any roadshow ever could”.
The think-tank group pointed out that the real cost is not felt in Ibeju-Lekki but at the pump, at the CBN’s FX desk and in boardrooms across the continent watching to see whether Nigerian energy law means what it says.
The AEC argues that Dangote’s crude dispute lays bare a governance failure that no court ruling can fully fix.
The body lamented that a state oil company acting as both supplier and competitor to the very refinery built to end Nigeria’s import embarrassment is a conflict of interest hiding in plain sight.
“Until NNPC’s commercial and regulatory roles are cleanly separated, the PIA remains a promise on paper, and Africa’s most ambitious private energy investment stays hostage to institutional self-interest,” it noted.
The drop in crude supply to the Dangote refinery is further supported by latest data released by the Nigerian Midstream Downstream Petroleum Authority (NMDPRA) for the month of May.
The report indicated that crude oil deliveries to Dangote, including other local refineries declined during the review period. Refiners received an average of 578,000 barrels of crude oil per day in May, down from 612,000 barrels per day in April, representing a decrease of 5.6 percent.
Industry observers pointed out that the development suggests that while local refining capacity continues to expand, refiners may still be facing operational and feedstock challenges that require supplementary imports to bridge supply gaps and maintain market stability.
The acquisition of an additional 40 percent interest in ND Western Limited, has seen Aradel Holding grow its total assets by a whopping 466 per cent to N9.9 trillion in the 2025 financial year.
Biztellers reports that the transaction conferred majority shareholding on Aradel, as its equity stake in Renaissance rose to 53.3 percent.
According to the energy company, the transaction, completed on December 31, 2025, also significantly expanded its reserves, production base and operational footprint, leading to a sharp increase in the size of its balance sheet.
Going by its audited results for the year ended December 31, 2025, total assets rose from N1.75 trillion in 2024 to N9.9 trillion, reflecting the consolidation of ND Western’s assets and liabilities and the carrying value of Aradel’s effective interest in Renaissance.
The company also reported a 192 percent increase in profit after tax to N757.3 billion from N259.1 billion in the previous year, while revenue rose by 20 percent to N699.4 billion from N581.2 billion.
In the same vein, operating profit increased by 152 percent to N733.6 billion from N291.4 billion, while earnings from associates rose by 246 per cent to N109.5 billion.
Aradel noted that the operational and income statement figures for 2025 do not include contributions from the newly acquired businesses because the transactions were completed on the last day of the financial year. It said only the balance sheet impact was consolidated as of December 31, 2025, while the full operational and earnings contributions are expected to be reflected from 2026.
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On the results, Chief Executive Officer, Adegbite Falade, said, “2025 was a defining year as we continued to strengthen our position as an integrated energy operating platform. We delivered record revenue and profitability, while executing the most transformational strategic expansion in our history.
Our additional 40 percent investment in ND Western and the resultant increase in our total effective interest in Renaissance (53.3 percent) significantly expanded our reserves, production base and operational footprint, positioning Aradel to operate at materially greater scale from 2026 onwards.”
On operations, crude oil production rose by three per cent to 14.1 thousand barrels per day from 13.8 thousand barrels per day in 2024, while gas production increased by 59 percent to 51.4 million standard cubic feet per day from 32.4 million standard cubic feet per day.
The company recorded crude oil sales of 4.1 million barrels during the year, up 32 per cent from the previous year, while refined product output increased by 18 percent to 313.4 million litres. Refinery utilisation improved to 49 percent from 40 percent in 2024. Gas revenue increased by 72 percent to N48.6 billion, while refined products revenue rose by 18 percent to N210.8 billion. Crude oil exports remained the largest revenue source, contributing N440.1 billion, or 63 percent of total revenue.
The company reported net cash generated from operating activities of N179.7 billion, compared with N311.9 billion in the previous year, while cash and cash equivalents rose to N1.5 trillion at the end of the period from N411.8 billion a year earlier.
Aradel’s board proposed a final dividend of N23 per share, bringing the total dividend for the 2025 financial year to N33 per share, compared with N26.4 per share paid for 2024.
Falade said the company would focus on integrating its expanded asset base, increasing production and diversifying revenue streams. “The consolidation of NDW and Renaissance fundamentally reset the scale of the Company’s balance sheet, giving us the asset and reserve base to underpin our future expansion. Our 2025 audited accounts therefore capture the balance-sheet impact of these acquisitions; their full earnings contribution will be reflected in the Group’s consolidated financial results from 2026 onwards.”
Reports that Iran has shut the strategic Strait of Hormuz, a strategic international shipping route again has sparked fresh concerns over global oil prices.
This latest shutdown comes barely 24 hours after it was reopened on the heels of a ceasefire arrangement with the United States.
According to a New York Post report which quoted the Islamic Revolutionary Guard Corps (IRGC), Iran cited a continued presence of United States forces in the region and Israel’s refusal to pull military forces out of southern Lebanon, where it had been pounding Hezbollah terrorists.
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The IRGC said the US violated the memorandum of understanding between Washington and Tehran, which President Donald Trump and Iranian President Masoud Pezeshkian signed last Wednesday.
The latest development has revived fears of disruptions to global crude oil supplies and a fresh rally in international oil prices, a scenario that could shake Nigeria’s downstream petroleum market.
The Strait of Hormuz remains one of the world’s most critical energy corridors, serving as the transit route for nearly a fifth of global oil consumption.
Any disruption along the waterway typically triggers nervous reactions in oil markets and raises concerns over energy security.
Industry observers warned that a prolonged closure could push crude oil prices higher, increase the cost of imported petroleum products and ultimately force a fresh upward adjustment in petrol prices across Nigeria.
For many Nigerians already grappling with high transportation and living costs, another spike in fuel prices would deepen existing economic pressures.
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