According to analysts at S&P Global Commodity Insights, Nigeria has secured its position as the leading importer of refined petrol in Africa amid a surge in petrol shipments from Europe to the continent.
The rise in crude oil shipments from the Middle East to Europe, triggered by the European Union’s ban on Russian oil since April 2023, has led to an abundance of refined petrol ships heading towards Africa, with Nigeria being the primary destination.
However, the report cautions that Nigeria’s reliance on petrol imports from Europe may not persist for long, as the full-scale operation of the 650,000-barrel Dangote refinery is anticipated to reduce the country’s import demand significantly.
The report stated, “Right now, the Europe gasoline surplus is heading to Africa, with Nigeria the largest importer, but that is not expected to last as increased production from Nigeria’s new 650,000 b/d Dangote refinery will mean reduced import demand in Nigeria and more supplies in Europe. European gasoline exporters will have to find alternative destinations or reduce runs or a combination of both.”
Nigeria has undertaken substantial efforts in recent years to decrease its dependence on refined petroleum imports, with some initiatives yielding positive results. In 2021, the Nigerian National Petroleum Corporation (NNPC) acquired a 20 per cent stake in the Dangote refinery for $1.036 billion.
Additionally, the NNPC has entered contracts for the rehabilitation of state-owned refineries in Delta, Rivers, and Kaduna. Phase 1 of the Port-Harcourt refinery was completed in December, capable of refining approximately 60,000 barrels of crude oil daily, while the Delta and Kaduna refineries are progressing at various stages of completion.
Despite delays since its commissioning in May 2023, the Dangote refinery, with a capacity of 650,000 barrels, commenced crude oil refining operations in December and began refining operations around February.
Since the removal of the petrol subsidy in June, the federal government has prioritised efforts to reduce crude oil importation as a strategy to stabilise local prices and alleviate pressure on foreign exchange demand for imports.
