Despite the fact that Nigeria is now home to the biggest oil refinery in Africa, Nigeria’s gasoline prices have soared to a record high amid the war in the Middle East.
Dangote, the biggest refinery in Africa which began operations in 2024, has already started exporting fuel to regions other than West Africa. The refinery started up in January 2024 with the launch of diesel and naphtha production and began producing gasoline in September 2024.
In the early days of the war in the Middle East, the refinery said it would keep its “unwavering commitment to serving as a stabilising force amid recent shocks in the international oil market.”
However, the cost of crude for the refinery has escalated along with the surge in international crude oil prices, as Dangote relies on crude imports to process fuels.
“The high crude cost is compounded by the fact that Nigeria upstream producers have failed to supply crude oil to the refinery as required under the PIA, forcing us to source a substantial portion through international traders who charge an additional premium,” Dangote’s management said on March 5.
Therefore, Nigerians now pay 65% higher prices for gasoline, according to Reuters, due to the refinery’s exposure to imports from the international markets.
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Dangote’s CEO David Bird told local outlet Arise TV last week that the refinery currently receives only five local cargoes out of the 13-15 crude cargoes previously agreed.
“We try and maintain some stability within a commercially acceptable range… but all our cost inputs—from crude to freight and insurance—are impacted,” Bird told Arise.
Despite setbacks in gasoline production last year, the Dangote refinery processed record volumes of crude per day in January 2026.
Just before the war, Dangote supplied 62% of the country’s premium motor fuel, overtaking fuel importers for the first time ever.
But now the international supply crisis has exposed the reliance on foreign crudes and the price Dangote is paying for such crude on the international market.
By Charles Kennedy for Oilprice.com
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