Says international traders frustrating local refining, decries huge port charges •NMDPRA, S&P partner for regional petroleum price index •Downstream regulator says only 31% of needed fuels refined in West Africa •Lokpobiri insists fossil fuels will remain relevant for decades •Ojulari pledges to dismantle structural bottlenecks in oil sector Emmanuel Addeh in Abuja Africa’s richest man and President of Dangote Industries Limited (DIL), AlikoDangote, yesterday decried the massive importation of petroleum products by Nigeria and other countries in Sub-Saharan Africa, stating that these African nations continue to lose up to $90 billion market opportunities to Asia, Europe and other continents. Dangote spoke in Abuja at the Global Commodity Insights Conference on West African Refined Fuel Market, organised by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in partnership with S&P Global, themed: “Creating a West African Reference Market for Oil and Gas Products”. The meeting signalled the beginning of processes to develop a regional pricing benchmark for refined petroleum products in West Africa, an initiative which aims to create localised indices for products such as petrol, diesel, aviation fuel and liquefied petroleum gas. In his keynote address tagged: “Building an African Refinery Hub: Prospects and Challenges”, the owner of the world’s largest single train refinery, the 650,000 barrels per day facility located in Lagos, argued that while Africa produces approximately 7 million barrels of crude oil per day, it only consumes only 4.3 million barrels of that. Troublingly, Dangote stated that just 40 per cent of that is refined domestically, with most of this production in Algeria and Egypt, and now Nigeria with the start of the Dangote refinery, explaining that in Sub-Saharan Africa, there are no more than three good working refineries. “To compare, Europe and Asia refine around 95 per cent 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 being captured by regions with surplus refining capacity. “To put this in perspective, only about 15 per cent of African countries have a Gross Domestic Product (GDP) greater than $90 billion. We are effectively handing over an entire continent’s economic potential to others—year after year,” he maintained. Dangote clarified that while he’s not against global trade and he believes in the power of free markets and international collaboration, trade should be rooted in the principles of economic efficiency, comparative advantage, and a fair playing field. He emphasised that it defies logic and economic sense for Africa to be exporting raw crude only to re-import refined products, which it is more than capable of producing itself, as it is closer to both source and consumption. Dangote classified the problems of establishing refineries in Africa into three broad categories , including technical, commercial, and contextual. In terms of technical challenges, to construct the 650,000 refinery, he stated that the company had to clear 2,735 hectares of land of which 70 per cent was swamp, which was debushed with 65 million cubic metres of sand, including over 250,000 foundation piles of 35 metres length, millions of metres of piping, cabling, and electrical wiring. At its peak, he said the refinery had over 67,000 people on-site, of which 50,000 were Nigerians, building not only the refinery but also a seaport, because Nigeria’s existing ports were incapable of receiving the over-dimensional and heavy cargo the project required. With over 2,600 pieces of heavy equipment, over 1,000 vehicles, and 330 cranes of 100 tons, he said the company built the world’s largest granite quarry, capable of producing 10 million tonnes annually—just to supply the stones needed. “After overcoming the technical challenges, we faced the second major hurdle: commercial viability. Once the refinery was ready, we proceeded to line up working capital to commence operations. Exchange rates have gone from N156 at inception to N1,600 at completion. The interest rates were exorbitant, but we had no choice. “One of the first commercial shocks came with crude feedstock sourcing. At the project’s inception, it was reasonable to assume that in a country producing about 2 million barrels per day, securing crude would be the least of our worries. But we were wrong. “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. “As we speak today, we buy 9-10 million barrels of crude monthly from the US and other countries. Even after securing the crude, transporting it became another bottleneck. Lifting schedules were constantly shifted by upstream operators, and we were hit with excessive port and regulatory charges. “Shockingly, port charges made up about 40 per cent of our total freight costs—meaning it costs two thirds as much as chartering a vessel itself, with crew, insurance, and fuel included. Meanwhile, 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,” he added. Besides, unlike Europe, which has adopted harmonised fuel specifications, Africa, he said, remains fragmented, with every country having its own fuel specification standard, pointing out that the lack of harmonisation benefits no one—except international traders, who thrive on arbitrage. As for contextual challenges, Dangote said the most formidable challenge it faced was entrenched rent-seeking within the petroleum value chain, explaining that across many African countries, the sector has historically been a major avenue for corruption and rent extraction. But just like the 52 million tonnes of cement capacity it ships across Africa, which will be at 60 million tons capacity by mid of next year, with a target export of $500 million of cement and clinker by 2027, Dangote said the same growth is happening in petroleum refining. “Today, Nigeria has become a net exporter of refined petroleum products, polypropylene, and urea—a historic turnaround. With our LPG production of 2,500 tons per day, we are working to encourage more homes to increase LPG utilisation. And we are just getting started,” he added. The Chief Executive of the Dangote Group also accused international traders of deliberately frustrating the establishment of new refineries and the efficient operation of existing ones in Africa, to protect their own dubious interests. “The problem is international traders are deliberately frustrating the establishment of new refineries and the efficient operation of existing ones in Africa, to protect their own dubious interests,” Dangote said. Also speaking at the two-day event, the Chief Executive of the NMDPRA, Farouk Ahmed, said 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, among others, for all its trading activities. “While these benchmarks are globally accepted, often they 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,” Ahmed stated. According to him, establishing a regional pricing reference point would facilitate: Growth of trading of petroleum products in the region, establishment of additional storage and supply infrastructure to accommodate the growing volumes of trading activities and real-time pricing data that is reflective of the peculiarities of the West African market fundamentals. He stated 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 per cent) imports and 0.61 million MT (31 per cent) refinery contribution from the region,” he stressed. He added that the partnership with S&P Global Commodity Insights seeks to employ world class market intelligence, reliable data integrity and extensive experience in the development of market benchmarks by S&P and the regulatory expertise of the NMDPRA. This he said will help launch pilot indices that capture refined product prices such as Premium Motor Spirit (PMS), Automotive Gasoil (AGO), Aviation Turbine Kerosene (ATK), and LPG in Nigeria and West African energy markets. Also speaking, the Minister of State for Petroleum (Oil), Senator Heineken Lokpobiri, stated that fossil fuels will still constitute 50 per cent of global energy needs, even in the next 50 years, noting that the fear that hydrocarbons are going into extinction was baseless. “Fossil fuel is the dominant source of energy globally from what we have seen from studies that have been carried out by experts. So in Nigeria, our mission is first of all to build the upstream because without it the downstream cannot be successful,” he stressed. Group Chief Executive of the Nigerian National Petroleum Company Limited (NNPC), BayoOjulari, in his remarks, reaffirmed the company’s commitment to dismantling structural bottlenecks towards laying a solid foundation for a self-sufficient refining ecosystem in Africa. According to the GCEO, through strategic review and repositioning of its refineries, strategic equity in the Dangote Refinery, condensate opportunities and support for other third-party projects, the NNPC couldkickstart Africa’s transformation into a refining hub. “NNPC Ltd stands ready. Ready to co-create, co-invest, and co-lead in building an African refining ecosystem that is inclusive, resilient, and globally competitive,” Ojulari added. He noted that infrastructure integration, indigenous ownership, and policy harmonisation remain essential drivers of downstream transformation and are critical to creating a credible African reference market that guarantees energy security, reduces import dependence, and powers Africa’s industrial aspirations. The GCEO also commended the Nigerian NMDPRA for organising the event and championing the conversation which will lead to Africa becoming energy sufficient. He charged stakeholders in the refining sector to move from declarations to delivery, from national ambition to regional execution and from fragmented development to system-scale transformation.