Amanze Chinonye
A growing number of African countries are turning to Nigeria’s massive refinery owned by Aliko Dangote in a bid to secure fuel supplies, as a widening global energy disruption linked to tensions between the United States, Israel and Iran continues to upend markets.
The Dangote Petroleum Refinery in Lagos has seen a spike in supply requests from across the continent, underscoring mounting concerns over fuel availability as traditional supply routes from the Middle East falter.
Leading the demand is South Africa, which is currently negotiating a 12 months-long supply arrangement with the facility. Other countries, including Ghana and Kenya, are also exploring supply options as governments scramble to cushion the impact of tightening global inventories.
Join our WhatsApp ChannelAt the heart of the disruption is Iran’s blockade of the Strait of Hormuz, a critical chokepoint for global oil shipments. The move has significantly curtailed tanker traffic through the corridor, triggering one of the most severe supply shocks in recent years and pushing oil prices sharply upward.
The ripple effects have spread quickly across continents. In Asia, major import-dependent economies such as India and Japan are already grappling with supply gaps, including shortages of cooking gas and reduced availability of key petrochemical feedstocks.
For Africa, the situation is particularly precarious. Many countries especially in East and Southern Africa depend heavily on refined fuel imports from the Middle East, with estimates suggesting the region sources up to 75 per cent of its supplies from the Gulf.
The disruption has therefore exposed the continent’s heavy reliance on external refining hubs.
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Oil prices have climbed more than 40 per cent since the crisis began, breaching the $100 per barrel mark and intensifying inflationary pressures across multiple sectors. In South Africa, authorities have warned that there is limited fiscal room to shield consumers from rising fuel costs, even as current supplies remain stable in the near term.
In Ethiopia, officials have gone a step further, urging citizens to cut back on fuel consumption as supply concerns mount.
Despite its growing importance, the Dangote refinery faces capacity constraints. The 650,000-barrel-per-day facility allocates roughly three-quarters of its output to Nigeria’s domestic market, leaving a relatively small share available for export at a time of surging continental demand.
Dangote himself has signalled the scale of the challenge, stressing that the issue has shifted from pricing to outright availability, with the current supply squeeze expected to persist in the near term.
Efforts to manage the crisis vary across countries. Kenya, for instance, requires oil marketers to maintain a minimum of three weeks’ stock, while South Africa says it has sufficient reserves for the coming weeks.
However, Africa lacks the strategic buffers common in advanced economies. Unlike members of the International Energy Agency, which must hold at least 90 days of net oil imports, no African country currently meets that threshold.
As global supply chains remain under strain, the Dangote refinery is fast becoming a crucial, if limited anchor for Africa’s energy security, highlighting both its strategic value and the urgent need for broader investment in local refining capacity.
Amanze Chinonye is a Staff Correspondent at Prime Business Africa, a rising star in the literary world, weaving captivating stories that transport readers to the vibrant landscapes of Nigeria and the rest of Africa. With a unique voice that blends with the newspaper's tradition and style, Chinonye's writing is a masterful exploration of the human condition, delving into themes of identity, culture, and social justice. Through her words, Chinonye paints vivid portraits of everyday African life, from the bustling markets of Nigeria's Lagos to the quiet villages of South Africa's countryside . With a keen eye for detail and a deep understanding of the complexities of Nigerian society, Chinonye's writing is both a testament to the country's rich cultural heritage and a powerful call to action for a brighter future. As a writer, Chinonye is a true storyteller, using her dexterity to educate, inspire, and uplift readers around the world.
