In a bid to reshape fuel distribution across Africa, the Dangote Refinery is reportedly in advanced negotiations with eight African countries to establish fuel supply agreements. The discussions involve South Africa, Angola, Niger Republic, Chad, Burkina Faso, Central African Republic, and Namibia, marking a significant push toward regional fuel self-sufficiency and reduced reliance on imports from overseas.
Beyond talks for Premium Motor Spirit (PMS), the refinery has already ramped up exports of diesel, reaching an impressive 100,000 barrels per day in May. Aviation fuel exports have also seen an uptick, underscoring Dangote Refinery’s capacity to meet diverse energy needs across the continent.
During the refinery’s formal start of petrol production in September, Aliko Dangote, chairman of the Dangote Group, emphasized the transformative potential of the refinery for Nigeria and Sub-Saharan Africa. “This refinery will change Nigeria and Africa’s Oil and Gas Industry dynamics,” Dangote said. He highlighted that the fuel produced at the refinery meets global standards, supporting longer-lasting engine performance and raising quality standards across the region.
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Last month, Ghana publicly expressed interest in purchasing fuel from the refinery. At the OTL Africa Downstream Oil Conference held in Lagos, Mustapha Abdul-Hamid, chairman of Ghana’s National Petroleum Authority, announced that sourcing fuel from Dangote could save Ghana up to $400 million monthly by reducing its fuel imports from Europe.
Meanwhile, challenges remain on the domestic front. Nigerian petroleum marketers have raised concerns over the pricing of fuel from the Dangote Refinery, claiming that its prices are currently less competitive than imported alternatives. This pricing tension has led some local marketers to continue importing rather than sourcing locally. However, industry experts believe that as the refinery ramps up to full capacity and adjusts its pricing strategies, it may offer Nigerian marketers more attractive terms. This, coupled with reliable distribution, could gradually shift demand toward local procurement.
The Dangote Refinery’s ongoing expansion efforts have the potential to revolutionize fuel access in Africa, bolstering the continent’s energy security while reducing reliance on overseas imports. With production levels increasing, the refinery’s impact is set to be transformative both within Nigeria and across Sub-Saharan Africa.
