Despite launching Africa’s largest oil refinery, a landmark challenge meant to revolutionize the continent’s gasoline trade, Nigeria’s Dangote Petroleum Refinery remains to be importing 9 to 10 million barrels of crude oil month-to-month from the U.S. and different international producers.
This revelation, made by Aliko Dangote himself, underscores the stark disconnect between Africa’s huge oil assets and its restricted refining capability.
Speaking on the West African Refined Fuel Conference in Abuja, Dangote described the scenario as economically irrational. “We’re producing crude and exporting it, solely to purchase it again as refined merchandise.
That is exporting jobs and importing poverty,” he stated. His speech was a scathing critique of the continent’s underinvestment in processing infrastructure and the regulatory atmosphere stifling refinery operations.
Africa imports an estimated 120 million tonnes of refined petroleum merchandise yearly, costing the continent roughly $90 billion — a determine that eclipses the GDP of most African nations.
Only 15% of nations in Africa have economies bigger than this annual gasoline import invoice, Dangote identified.
Despite producing about 7 million barrels of crude oil per day, Africa solely refines about 40% of its personal consumption of refined merchandise domestically.
This lags far behind areas like Europe and Asia, which refine over 95% of their gasoline demand inside their borders.
Dangote additionally raised the problem of substandard petroleum merchandise being dumped into African markets.
With weak or fragmented gasoline requirements throughout borders, merchants are flooding the continent with blends that might be unlawful in Europe or North America. “This disunity allows middlemen to thrive while undercutting legitimate regional players,” he stated.
He cited an instance with diesel: Nigeria mandates a diesel cloud level of 4°C — a spec higher suited to colder climates.
This restriction limits the kinds of crude Dangote Refinery can course of and drives up prices unnecessarily, particularly since most components of Nigeria not often drop beneath 12°C.
While the refinery stands as a technical marvel — boasting a footprint seven occasions the dimensions of Victoria Island, 250,000 basis piles, and 67,000 employees at its peak — its operations stay choked by regulatory and logistical inefficiencies.
“The cost of moving petroleum within Nigeria can be higher than importing it from overseas,” Dangote revealed. Port prices alone account for 40% of freight prices — usually greater than the vessel constitution itself.
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And in contrast to rival ports in Lomé, the place exporters pay solely at discharge, Nigerian refineries are charged each at loading and unloading.
Another paradox: regardless of Nigeria producing over 2 million barrels per day, the Dangote Refinery struggles to get home crude at aggressive costs.
Dangote accused international buying and selling firms of appearing as intermediaries — shopping for Nigerian oil and reselling it at premium costs to native refiners. “This makes no economic sense,” he stated.
Even in a deregulated market, the refinery is being pressured into international spot markets whereas dealing with foreign money volatility. “At inception, the change charge was N156 to the greenback.
Today, it’s over N1,600,” he famous — a staggering 10x leap that’s additional inflated enter prices.
The $19 billion Dangote Refinery was by no means nearly gasoline. It’s an industrial ecosystem: it features a seaport, a devoted energy plant, a pipeline community, and the world’s largest granite quarry.
But with out a coordinated regional coverage, supportive rules, and rational gasoline requirements, even essentially the most formidable personal ventures threat working beneath capability.
Dangote’s message was clear: Africa has the assets, the expertise, and now the infrastructure.
What it lacks is alignment — from governments, regulators, and commerce companions. Without it, the continent will proceed to ship out its uncooked wealth and purchase it again at a premium.
