Africa’s Imported Substandard Fuel Costs $90 Billion Annually – Dangote
Aliko Dangote, President and Chief Executive of Dangote Industries Limited has said that Africa is increasingly becoming a destination for cheap, often toxic petroleum products.
Dangote made this revelation while speaking at the West African Refined Fuel Conference in Abuja, adding that the continent imports over 120 million tonnes of refined petroleum products annually, at a cost of approximately $90 billion.
Dangote explained that despite producing around 7 million barrels of crude oil per day, Africa only refines about 40% of its 4.3 million barrels’ daily consumption of refined products domestically.
In contrast, he said Europe and Asia refine over 95% of what they consume, stressing that this has resulted in Africa exporting raw crude and re-importing refined products, effectively exporting jobs and importing poverty into the continent.
The Dangote Refinery, one of the largest single-train refineries in the world, has faced significant challenges, including technical, commercial, and contextual hurdles unique to the African landscape.
Dangote revealed that the refinery required clearing 2,735 hectares of land, constructing a dedicated seaport, and importing over 2,500 pieces of heavy equipment.
Despite its technical success, the refinery has struggled to secure crude oil at competitive terms, with the company often having to negotiate with international trading companies that buy Nigerian crude and resell it to them at hefty premiums.
Dangote also emphasized the lack of harmonized fuel standards across African nations, which creates artificial barriers for regional trade in refined products.
The President and Chief Executive of Dangote Industries cited the example of diesel production in Africa, where different countries have different standards, making it difficult for refiners to produce products that meet the requirements of multiple countries.
Dangote lamented the growing influx of discounted, low-quality fuel originating from Russia, which is blended with Russian crude under price caps and dumped in African markets.
Dangote urged African governments to follow the example of the United States, Canada, and the European Union, which have implemented protective measures for domestic refiners.
He harped on the need for trade to be grounded in economic efficiency and comparative advantage, rather than at the expense of quality or safety standards.
Dangote opined that by addressing these challenges, he believes that Africa can reduce its dependence on imported refined products and unlock its economic potential.