Dangote Refinery Leverages Middle East Shock as Cheap Imports Dry Up

• Facility exports products to Cote d’Ivoire, Cameroon, Tanzania, Ghana, Togo

•Aliko Dangote: Prolonged Iran tensions leading to rising fuel prices

Deji Elumoye and Emmanuel Addeh in Abuja

The Dangote Refinery is rapidly consolidating its position in Africa’s downstream oil market, capitalising on supply disruptions from the Middle East that have significantly curtailed the flow of cheap refined fuel imports into the continent.

The shock, triggered by escalating geopolitical tensions and attacks on key energy infrastructure in the Gulf, has tightened global product availability and driven up prices, creating a window of opportunity for the Lagos-based facility to expand its footprint.

With traditional supply routes from the Middle East under strain, several African countries that have long depended on imported petrol, diesel and aviation fuel are increasingly turning to the Dangote Refinery as a more reliable and geographically closer alternative, THISDAY learnt.

Already, the plant has ramped up shipments across West and parts of Central and East Africa, exporting refined products to Côte d’Ivoire, Cameroon, Tanzania, Ghana and Togo in recent weeks.

Quoting data from tanker-tracking firm, Kpler, a Reuters report stated that Nigeria’s exports of clean petroleum products which include petrol, diesel, kerosene and jet fuel have risen to about 214,000 barrels per day so far in March from an average of 100,000 bpd in February.

Shipments to other African countries have climbed to about 90,000 bpd from 38,000 bpd previously.

Besides, the 650,000 barrels per day Dangote refinery has sold 12 cargoes of petrol, totalling 456,000 metric tons, on a free-on-board basis to international traders, with shipments already delivered. The sales mark Dangote’s first exports of petrol since the plant reached full capacity in February.

The escalating Middle East conflict has pushed up global crude prices, lifting feedstock costs for refiners worldwide. At the same time, shipping disruptions and lower fuel availability from Europe and the Gulf have cut flows of low-cost refined products into West Africa. That has created opportunities for suppliers with shorter supply chains.

Dangote’s owner Aliko Dangote has been sparring with Nigerian regulators over continued petrol imports, which he contends undermine his refinery.

However, although disputed by the Dangote Refinery, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recently announced that it halted granting imports licences to marketers. Since the Iranian war, domestic pump prices have risen more than 50 per cent as the conflict roiled energy markets.

The country consumes an estimated 50 million to 60 million litres of petrol a day, nearly one-fifth of Africa’s total demand, making fuel availability and pricing acutely sensitive to swings in global markets.

For decades, West Africa has depended heavily on imported fuel cargoes from Europe and the Middle East, often of lower quality, leaving the region exposed to logistical delays and external supply shocks, the Reuters report added.

Preliminary data shows that Nigerian fuel imports are at a daily average of 90,000 bpd so far in March, according to Kpler, down from 209,000 bpd for the whole of February.

Arrivals from offshore Togo, which Dangote has previously accused of being the source of dirty fuel imports into the country, have fallen to zero so far in March, compared with 60,000 bpd in February.

Earlier, the Dangote Refinery said the new product routes will help “enhance energy security in West, East and Central Africa, reducing logistics and supply chain delays associated with long-distance fuel imports.”

“The products were sold on a FOB (Free on Board) basis to the end international traders for deliveries to the above-identified countries of export. This accomplishment underscores the Dangote Refinery’s capability to not only meet but exceed Nigeria’s domestic fuel demands.

“It also demonstrates the refinery’s growing role in supplying high-quality Euro 5 gasoline and diesel to West Africa — a region long underserved and historically regarded as a dumping ground for lower-quality fuels, and other regions which have become destinations of exports,” it said.

The new approach, the refinery said, helps to reduce logistics and supply chain delays linked to long-distance fuel imports, easing cost pressures on regional fuel markets through closer sourcing, while also fostering stronger trade ties between Nigeria and key African economies.

Some African countries that have long depended on large refineries in the Persian Gulf for fuel are reportedly now looking to Dangote refinery as an alternative source.

The ongoing disruption has altered long-standing trade flows, forcing importers to diversify sourcing strategies while reducing reliance on distant suppliers vulnerable to geopolitical shocks.

The Dangote Refinery, with its large-scale capacity and proximity advantage, is emerging as a key beneficiary, offering shorter delivery times and potentially lower freight costs compared to cargoes sourced from Europe or the Gulf.

Meanwhile, President of the Dangote Group, Aliko Dangote, has declared that although Nigeria has no direct role in the Middle East crisis, it will still feel its impact due to deep global economic interdependence.

Speaking with newsmen yesterday after paying a Sallah homage to President Bola Tinubu at his Ikoyi, Lagos residence, Dangote warned that the Middle East crisis driving global oil volatility could have far-reaching consequences for Nigeria and African economies.

“We are part of a global village, and unfortunately, developments like this will affect us even if we are not directly involved,” he said.

According to him, prolonged tensions could trigger higher fuel prices, rising transport costs, inflationary pressures, and widespread hardship across African economies. “If the situation does not de-escalate, we will end up paying a heavy price, especially given existing economic challenges”.

Dangote submitted that governments could face mounting fiscal strain as subsidies rise and revenues fluctuate under unstable global oil market conditions. He added that Africa’s rising debt burden could worsen under prolonged instability, further limiting fiscal space and weakening economic resilience.

“Africa is already grappling with debt, and additional shocks will only compound hardship for governments and the people,” he stated.

He said escalating energy costs would disrupt nearly every sector, including small enterprises, manufacturing chains, logistics operations and household consumption patterns.

“If you look at it now, when you talk about energy, energy affects almost everything and it’s not only energy, some people will try and take a chance and say this an opportunity so let me make money.

“So if this thing doesn’t de-escalate, it is going to keep going up and governments cannot really now go and add salaries. So people will really feel the heat. People like barbers, people who are making bread, people who have industries, who have to fire their own generators.

“I mean, you can see, in some countries today what they’ve done is ask everybody to work from home because they cannot… I think in Indonesia or so, they said only go to work four days a week and they will look at the situation, if it doesn’t improve, they will ask everybody not to go to work anymore. We did that in the time of COVID-19, where people worked from home.

“So I pray, and we all need to pray that this thing de-escalates. If it doesn’t escalate, normally we in Africa, we don’t have any reserves in terms of savings or in terms of… people normally go out and look for money for the next day or even for the same day. If they don’t work that day, they won’t eat. So I think really, we just need all hands on deck to pray that this thing comes to an end.

“Energy affects everything. From small businesses like barbers to industries running generators, everyone will feel the impact if costs continue to rise,” he stated.

Dangote urged global leaders to prioritise de-escalation, stressing that many Africans rely on daily earnings and remain highly exposed to economic shocks.

“In Africa, in Nigeria, many people depend on daily earnings. If they don’t work, they don’t eat. So we must pray this situation comes down quickly,” he explained.