Nigeria's Dangote warns cheap Russian oil products threaten African refineries
Nigerian billionaire Aliko Dangote has warned discounted Russian petroleum products are pouring into African markets and risk undermining the continent's emerging refining industry.
Dangote, who has been ramping up Africa’s largest refinery—a $20-B facility with an initial capacity of 650,000 bpd on the outskirts of Lagos—has struggled to secure crude supplies locally even as he aims to expand the capacity to 700,000 bpd.
"We are now increasingly facing the dumping of cheap, often toxic petroleum products, some of which are blended to substandard levels that would never be allowed in Europe or North America," Dangote said at an oil conference in Abuja. He attributed this trend to Western sanctions on Russian oil, which have prompted Moscow to offer steep discounts to alternative markets, including Africa.
Dangote also expressed concern about the Lomé floating oil market off the coast of Togo, which is dominated by international traders. With over 2 MMbbl of stored petroleum products, Lomé has become a key hub for fuel imports and Dangote warned it could undermine Africa's refining efforts.
Despite Africa producing around 7 MMbpd of crude oil, only 40% of its consumption is refined locally. The continent still imports over 120 metric MMtpy of refined products. Dangote’s refinery, which began operations last year, has started exporting petrol, with exports reaching 1 MMt since June. However, he said local producers faced stiff competition from international traders who exploited regulatory gaps and inconsistent fuel standards across African countries.
To protect the domestic industry, Dangote urged African governments to adopt measures employed in the United States, Canada and Europe, such as tariffs and emissions caps.
Despite Dangote's concerns, Africa remains a small market for Russian oil products compared to major buyers like Turkey and Brazil. In June, Russian diesel and gasoil exports to African countries dropped 30% from the previous month, totaling about 0.7 MMt. Morocco, Tunisia, Togo and Egypt were among the largest importers, according to shipping data. Additionally, some vessels loaded in May with about 230,000 tons of Russian diesel had their destinations marked as "for orders," indicating that final discharge points were not declared or not yet determined.
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