Dangote Refinery to reduce Africa’s $17 Billion European Oil Imports, undercuts Foreign Refineries – Report  

Nigeria’s Dangote oil refinery is poised to slash the annual $17 billion gasoline importation from Europe to Africa, placing additional stress on European refineries threatened by rising competitive forces. 

A Reuters report suggests that the full operational capacity of the refinery might force the closure of several small set European refineries, unable to withstand the competitive pressures in the European and US markets. 

The refinery, which commenced production in January following a construction cost of $20 billion, boasts a refining capacity of 650,000 bpd.  

Upon reaching its full capacity, expected either this year or next, it will become one of the largest refineries across Africa and Europe. 

In 2023 alone, approximately one-third of Europe’s average gasoline exports, which stood at 1.33 million barrels per day (bpd), were destined for West Africa, making it the largest regional recipient.  

Notably, Nigeria was the primary endpoint for most of these exports, according to data from Kpler. 

Despite being the most populous country in Africa and its leading oil producer, Nigeria has to import nearly all of its fuel because it lacks the necessary refining capacity. 

Moreover, Kpler’s analyst Andon Pavlov noted that 300,000 to 400,000 barrels per day (bpd) of Europe’s refining capacity could face shutdown due to the surge in global gasoline production. 

According to Pavlov, the refineries in Grangemouth, UK, and Wesseling, Germany, are at risk of premature closure because of an impending glut in gasoline and the resulting strain on refining profits. 

In addition to the mounting pressure of the emergence of a Dangote refinery supplying oil and energy to Nigeria and other neighbouring countries in Africa, the European refineries have struggled to maintain an upward trajectory for decades due to market fluctuation and less demand for fossil fuels globally.  

Data from the refining industry organization Concawe indicates that approximately 30 European refineries have been closed since 2009, leaving nearly 90 facilities of diverse sizes and complexities operational. 

The decrease in imports from West Africa is expected to occur simultaneously with the introduction of new environmental regulations in Northwest Europe.