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According to analysts at S&P Global Commodity Insights, Nigeria has emerged as the leading importer of refined petrol in Africa amid a surge in petrol shipments from Europe to the continent.
The ban on Russian oil by the European Union since April 2023 has led to a significant increase in crude oil shipments from the Middle East to Europe.
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Consequently, surplus refined petrol vessels from Europe are now being redirected to Africa, with Nigeria being the primary destination.
However, the report warns that Nigeria’s reliance on petrol imports from Europe is expected to diminish once the Dangote refinery, with a capacity of 650,000 barrels per day, reaches full production.
This increased local production will likely lead to reduced import demand in Nigeria and surplus supplies in Europe. Consequently, European petrol exporters will need to seek alternative markets or decrease production, or both, to adjust to the changing dynamics.
It’s worth noting that Nigeria has undertaken various initiatives in recent years to decrease its reliance on refined petroleum imports.
These efforts include purchasing a 20% stake in the Dangote refinery and initiating contracts to rehabilitate state-owned refineries in Delta, Rivers, and Kaduna.
Phase 1 of the Port-Harcourt refinery was completed in December, with the Delta and Kaduna refineries also progressing towards completion.
The Dangote refinery, with its 650,000-barrel capacity, began refining crude oil in December and commenced full operations around February, albeit facing delays since its commissioning in May 2023.
Since the removal of the petrol subsidy in June, the federal government has aimed to reduce crude oil imports as part of measures to stabilize local prices and alleviate foreign exchange demand on imports.
