Wednesday, July 23, 2025 - The President/Chief Executive Officer of Dangote Industries Limited, Aliko Dangote, has revealed that the group’s petroleum refinery imports about 9-10 million barrels of crude every month from the US and other countries.
This was made known by Dangote while delivering a keynote
address at the ongoing West African Refined Fuel Conference held in Abuja.
The event is organised by the Nigerian Midstream and
Downstream Petroleum Regulatory Authority (NMDPRA) and S&P Global Commodity
Insights.
Dangote said that they have been buying crude oil from
international trading companies, which buy this commodity from Nigeria at very
high premiums
Dangote lamented that Africa is increasingly becoming a
destination for cheap, often toxic petroleum products — many of which are
blended to substandard levels that would not be permitted in Europe or North
America.
He revealed that, due to the continent’s limited domestic
refining capacity, Africa imports over 120 million tonnes of refined petroleum
products annually, at a cost of approximately $90 billion.
He said, “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% of African countries have a GDP greater than $90 billion. We are
effectively handing over an entire continent’s economic potential to
others—year after year.’’
While reaffirming his belief in the power of free markets
and international cooperation, Dangote emphasised that trade must be grounded
in economic efficiency and comparative advantage — not at the expense of
quality or safety standards.
He stressed that, “it defies logic and
economic sense for Africa to be exporting raw crude only to re-import refined
products—products we are more than capable of producing ourselves, closer to
both source and consumption.”
Reflecting on the experience of delivering the world’s
largest single-train refinery, Dangote also highlighted a range of challenges
faced, including technical, commercial, and contextual hurdles unique to the
African landscape.
Africa’s wealthiest man described building refineries such
as the Dangote Petroleum Refinery as one of the most capital-intensive and
logistically complex industrial facilities ever constructed.
The Dangote refinery project, he said, required clearing
2,735 hectares of land (seven times the size of Victoria Island), of which 70%
was swampy, requiring the pumping of 65 million cubic metres of sand to
stabilise the site and raise it by 1.5 metres, over 250,000 foundation piles,
and millions of metres of piping, cabling, and electrical wiring among others.
He said, “At peak, we had over
67,000 people on-site, of which 50,000 are Nigerians, coordinating around the
clock across hundreds of disciplines and nationalities. Then, of course, came
the COVID-19 pandemic, which set us back by two years and brought new levels of
complexity, disruption, and risk. But we persevered.’’
The refinery also required the construction of a dedicated
seaport, as existing Nigerian ports could not handle the size and volume of
equipment required. This included over 2,500 pieces of heavy equipment, 330
cranes, and even the establishment of the world’s largest granite quarry, with
a production capacity of 10 million tonnes per year.
“In short, we didn’t just build a refinery—we
built an entire industrial ecosystem from scratch,” he said.
Despite the refinery’s technical success, Dangote identified
significant commercial challenges, particularly exchange rates, which have gone
from N156/$ at inception to N1,600/$ at completion, and challenges around crude
oil sourcing. Although Nigeria is said to produce about 2 million barrels per
day, the refinery has struggled to secure crude at competitive terms.
He said, “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.’’
Dangote, however, praised the Nigerian National Petroleum
Company Limited (NNPC) for making some cargoes of Nigerian crude available to
them from the start of production to date.
Logistics and regulatory bottlenecks have also taken a toll.
Port and regulatory charges reportedly account for 40% of total freight costs,
sometimes costing two-thirds as much as chartering the vessel itself.
Dangote said, “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 that, in terms of port charges, it is currently
more expensive to load a domestic cargo of petroleum products from the Dangote
Refinery, as customers pay both at the point of loading and the point of
discharge. In contrast, when they load from Lomé, which competes with them,
they pay only at the point of discharge.
Dangote further criticised the lack of harmonised fuel
standards across African nations, which creates artificial barriers for
regional trade in refined products.
He said, “The fuel we produce for Nigeria cannot be
sold in Cameroon or Ghana or Togo, even though we all drive the same vehicles.
This lack of harmonisation benefits no one—except, of course, international
traders, who thrive on arbitrage. For local refiners like us, it fragments the
market and imposes unnecessary inefficiencies.”
Dangote cited the growing influx of discounted, low-quality
fuel originating from Russia, blended with Russian crude under price caps and
dumped in African markets.
He called on African governments to follow the example
of the United States, Canada, and the European Union, which have implemented
protective measures for domestic refiners.
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