Ghana could soon source petroleum products from Nigeria’s Dangote Petroleum Refinery rather than Europe, potentially saving the country millions. Ghana’s National Petroleum Authority Chairman, Mustapha Abdul–Hamid, highlighted at the OTL Africa Downstream Oil Conference in Lagos that this move could eliminate monthly imports costing $400 million. Ghana hopes to cut freight costs and lower fuel prices for its citizens by reducing its dependency on Europe.
The $20 billion Dangote refinery, launched in Lekki, Nigeria, has begun supplying Premium Motor Spirit (PMS) locally but could soon reach a production capacity of 650,000 barrels per day (bpd). This exceeds Nigeria’s demand, making surplus fuel available for export. Abdul-Hamid explained that if the refinery operates at full capacity, Ghana could save on costs and logistical expenses by importing from Nigeria rather than Rotterdam.
The Dangote refinery is expected to run near full capacity by the end of 2024 and fully operational by the first quarter of 2025. This development aligns with a broader regional trend toward energy independence, as Africa aims to reduce reliance on overseas fuel imports. Abdul-Hamid noted that eventually, a unified African currency could lower demand for U.S. dollars in trade, adding stability to fuel prices.
Why Nigeria Continues Importing Fuel Despite Dangote Refinery
Nigeria’s total deregulation of the downstream oil sector led to continued fuel imports, even after the refinery’s launch. Domestic marketers have imported PMS to supplement local demand until the Dangote refinery achieves full operational capacity and licensing. This situation underscores the challenges in meeting Nigeria’s extensive fuel demand, as the country’s own refineries have struggled with years of inactivity.
Efforts to Address LPG Affordability in Nigeria
At the conference, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) Chief Executive, Farouk Ahmed, emphasized the need for a structured domestic pricing framework for Liquefied Petroleum Gas (LPG). He discussed collaboration with domestic LPG producers, including Chevron Nigeria Ltd, Mobil Producing Nigeria Ltd, and Nigerian LNG, to reduce the cost of cooking gas and improve accessibility for Nigerian consumers.
The Broader vision for Nigeria’s Energy Sector
The Dangote refinery represents a cornerstone in Nigeria’s pursuit of energy self-sufficiency. Ahmed reaffirmed the government’s commitment to increasing domestic refining capacity, targeting 2 million barrels of liquid oil production and 10 billion cubic feet of gas for domestic use. With these measures, Nigeria aims to become a net exporter of petroleum products, transforming its energy landscape and influencing the broader West African market.
