Dangote reveals plot to crush African refineries
Aliko Dangote, President of the Dangote Group, has highlighted that the existence of a floating offshore oil market in Lome, Togo, poses a significant threat to Africa’s refining ambitions, potentially discouraging investors from building new refineries on the continent.
According to Dangote, the offshore market had been selling refined products at inflated prices, capitalizing on Africa’s refinery shortage, but swiftly dropped prices once his refinery began operations.
He made the disclosure at the Global commodity insights conference on West Africa organised by the Nigerian Midstream and Downstream Petroleum Regulatory Authority and S&P, on Tuesday, in Abuja.
“The offshore market is a uniquely African phenomenon,” Dangote noted, adding that international traders had been holding approximately two million tonnes of petroleum products in floating storage, which were sold at high prices due to Africa’s refinery shortage. But with the Dangote Refinery’s launch, the market dynamics changed, and prices were suddenly slashed.
READ ALSO: Dangote halts fuel discount scheme amid fraud allegations
“But make no mistake—those who profit from this system will do everything they can to prevent other refineries from emerging. The whole essence of Lome is to ensure that no refinery operates in Sub Saharan Africa. In fact, I don’t see any new major refining project succeeding with the offshore Lome market in existence.
He, however, said these obstacles must be dismantled through policy alignment, regional cooperation, and strong political will.
“Without political support, there is no way for any new large refinery to be built in our lifetime.
He added that across many African countries, this sector has historically been a major avenue for corruption and rent extraction.
READ ALSO: Dangote slashes petrol price to ₦840 per litre
“When you build a refinery and disrupt that system, you are not just innovating, you are threatening powerful interests that will seriously fight back.”
He went on to state that another challenge hindering inter-African trade is lack of unified standard for petroleum products.
“Unlike Europe, which has adopted harmonised fuel specifications, Africa remains fragmented. Every country has its own fuel specification standard. 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. To give one example, the diesel cloud point for Nigeria is 4 degrees.
READ ALSO: After 20 years, Dangote retires as chairman of Dangote Sugar Plc
Without going into the technical details, this means that the diesel should work at a temperature of 4 degrees centigrade. Achieving this comes at a cost to us and limits the types of crude we could process.
But how many places in Nigeria experience temperatures of 4 degrees? Other African countries have a more reasonable range of 7 to 12 degrees. This is a low hanging fruit which could be addressed by the regulators.”
Follow the Neptune Prime channel on WhatsApp:
Do you have breaking news, interview request, opinion, suggestion, or want your event covered? Email us at neptuneprime2233@gmail.com
