S&P Global Reports Nigeria as Africa’s Foremost Importer of Refined Petrol From Europe
According to analysts at S&P Global Commodity Insights, Nigeria has emerged as the primary importer of refined petrol in Africa amidst a surge in petrol shipments from Europe to the continent.
Following the European Union’s ban on Russian oil from April 2023, there has been a notable rise in crude oil shipments from the Middle East to Europe. Consequently, surplus refined petrol ships from Europe are now being directed towards Africa, with Nigeria being the primary destination.
Nevertheless, the report cautioned that Nigeria’s reliance on petrol imports from Europe is likely to be temporary, given the impending full-scale production from the 650,000-barrel Dangote refinery.
Analysts highlighted that European petrol exporters may need to seek alternative markets once the Dangote refinery becomes fully operational, or potentially reduce their supply to Africa as a whole.
The report stated 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 made concerted efforts in the past few years to reduce refined petroleum imports some of which have begun to bear fruit. In 2021, the NNPCL decided to purchase a 20 percent stake in the Dangote refinery for $1.036 billion.
“Also, the NNPCL entered contracts to repair the state-owned refineries in Delta, Rivers and Kaduna. In December, phase 1 of the Port-Harcourt refinery was completed which will refine around 60,000 barrels of crude oil daily while the Delta and Kaduna refineries are at various stages of completion.
“The 650,000-barrel capacity Dangote refinery began receiving crude oil for refining in December and started refining around February despite delays since its commissioning in May 2023.
“Since the removal of the petrol subsidy in June, the federal government have sought to reduce the importation of crude oil as a measure to stabilize local prices and reduce FX demand on import”, the analysts said.
