Aliko Dangote’s Nigerian oil refinery is facing a surge in demand from African governments struggling to secure fuel supplies due to the Iran war.
The 650,000-barrel-a-day Dangote Petroleum Refinery and Petrochemicals has been approached by countries like South Africa, Ghana, and Kenya, seeking to diversify their fuel imports.
The refinery’s limited export capacity, with 75% reserved for Nigeria, highlights Africa’s vulnerability to supply shocks.
“Right now, it’s not about pricing, it’s about availability,” Dangote told the Economist.
The situation is expected to continue for a while, with fuel prices potentially rising due to global market volatility.
The Iran war has disrupted fuel supplies to east and southern Africa, where about 75% of refined-fuel imports come from the Middle East.
Countries like Ethiopia and Somalia are already feeling the pinch, with fuel prices nearly doubling in some areas.
Nigeria has recorded the sharpest increase in petrol prices globally, with prices ranging from N1,130 to N1,350 per litre.
The Dangote Refinery has revised fuel prices multiple times, citing rising crude oil costs and global market volatility.
The Nigerian government is working to secure crude oil supplies for the Dangote Refinery, and the refinery is exploring alternative sources, including imports from the US. However, experts warn that sourcing crude internationally may not immediately reduce pump prices.
