₦airaland Forum

By Daily Trust


Several African countries, including South Africa, Ghana and Kenya, are turning to Nigeria’s Dangote Refinery as fuel supplies from the Middle East tighten following disruptions linked to the ongoing Israel-US-Iran war and threats to the Strait of Hormuz.

According to Bloomberg, the supply crunch has left many African nations scrambling for alternatives, having long depended on large refineries in the Persian Gulf for refined petroleum products.

At the centre of the shift is Africa’s richest man, Aliko Dangote, whose 650,000-barrel-per-day refinery on the outskirts of Lagos is now emerging as a critical lifeline for the continent.

The $20 billion facility, which began operations in 2024 after years of delays and cost overruns, has been ramping up production and is already witnessing a surge in demand from across Africa as governments seek to avert looming energy shortages.

Industry sources say the refinery is fielding strong interest from multiple countries, with some already initiating talks to secure supply agreements.

The crisis underscores Africa’s long-standing dependence on imported refined fuel, even among oil-producing nations. Until recently, Nigeria exported crude oil abroad for refining and then re-imported finished products at significantly higher costs.

While the Dangote Refinery has helped reverse that trend, domestic demand in Nigeria still accounts for roughly three-quarters of its output, leaving only limited volumes available for export to other African markets.

Analysts warn that the plant alone cannot fully bridge the continent’s fuel deficit, particularly as many countries lack sufficient strategic reserves to cushion prolonged supply disruptions.

Governments are already rolling out contingency measures. Ethiopia has urged citizens to conserve fuel, prioritising public transport, while major firms in South Africa are taking steps to secure supplies for critical operations.

The scramble for fuel is expected to intensify competition among African buyers, a development likely to boost revenues for Dangote’s refinery.

Speaking with The Economist recently, Dangote noted that the current situation is driven less by pricing and more by availability, warning that the supply squeeze may persist as geopolitical tensions continue to disrupt global energy flows.

“Right now it is not about pricing, it’s about availability. I think the situation will continue for a while,” he said.

With Africa’s fuel import dependence growing over the years, the evolving crisis is now accelerating a shift toward regional refining solutions — with Nigeria’s mega refinery at the forefront.

No African country is a member of the International Energy Agency, which requires member states to hold at least 90 days of net oil import reserves — a benchmark that throws the continent’s exposure into sharp relief.

jydeskill1:
God bless Tinubu for the visionary leadership in Lagos which facilitated the establishment of this monumental project here.

brain54:
Win win for dangote...

Dude hit an oil windfall.


Rich people will always keep getting richer!

jyz200:
Good one for Nigeria and Dangote