Dangote Expands Reach: Fuel Exports to South Africa, Other Nations

Dangote Refinery to Fuel Africa's Growth

“We call on Nigerians to support the call for dismantling monopolies so that we can liberate the market...”

Nigeria's fuel market heats up as PETROAN, IPMAN plan independent petrol imports amid Dangote Refinery's dominance.

The Dangote Refinery and Petrochemical complex is gearing up to export fuel to South Africa, Angola, and Namibia, with advanced discussions underway to make this a reality. This massive refinery, capable of producing 650,000 barrels per day, is also in talks with four other African countries - Niger Republic, Chad, Burkina Faso, and the Central African Republic - to supply fuel.

New Export Opportunities

Other countries are expected to join the fold in the coming months, taking advantage of the refinery's capacity to meet their fuel needs. Ghana, for instance, has already expressed interest in purchasing petrol from the $20 billion Lekki-based refinery.

Benefits for Ghana

According to Mustapha Abdul-Hamid, Chairman of Ghana's National Petroleum Authority, partnering with Dangote Refinery could eliminate Ghana's monthly $400 million fuel imports from Europe. This move would not only boost Ghana's economy but also strengthen regional cooperation.

Regional Impact

The Dangote Refinery's expansion into the international market is set to shake up the fuel trade dynamics in Africa. With its massive production capacity and strategic location, the refinery is poised to become a key player in meeting the continent's fuel demands.

“I can confirm to you that talk is actually at advance stage with Ghana, Angola, Namibia and South Africa, while initial discussion is coming up with Niger, Chad, Burkina Faso and Central African Republic,” the source said.

The source suggested that marketers' unwillingness to purchase from Dangote Refinery may be motivated by factors beyond mere business considerations.

“However, between now and January 2025, their plan would be exposed. Dangote refinery remains the hope of this country for a sustainable supply of petrol and the refinery has the capacity to serve the entire country,” the source added.

Local fuel marketers in Nigeria are taking matters into their own hands to address rising fuel costs. The Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) have announced plans to import petrol independently, citing concerns over the high prices set by the Dangote refinery.

Reasons for Independent Importation

The marketers believe that importing fuel at more affordable rates will provide relief for consumers affected by price increases after the fuel subsidy removal. They are now awaiting approval from the Central Bank of Nigeria (CBN) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to proceed.

Requirements for Importation

To import fuel, the marketers require foreign exchange support from the CBN and permits from the NMDPRA to ensure compliance with quality and regulatory standards. However, the NMDPRA has clarified that import licenses will only be granted to individual applicants, not associations.

NMDPRA's Stance

An NMDPRA official emphasized that the agency cannot approve import licenses for associations, as stipulated by law. Individual marketers must apply separately to obtain the necessary permits. This development may impact the plans of IPMAN and PETROAN to import fuel collectively.

Dangote Refinery's Expansion

Meanwhile, the Dangote Refinery is expanding its reach, with plans to export fuel to South Africa, Angola, and Namibia. The refinery has already started discussions with these countries and four other African nations - Niger Republic, Chad, Burkina Faso, and Central Africa Republic.

“The truth of the matter is that they can't apply for petrol import licence as a body or association. Individual marketers have to apply by themselves before they can be granted that licence. They have to apply by themselves. We are not going to give the permit jointly so they can't apply as an association,” the anonymous said.

“So, this also means that if individual marketers don't apply for it, we can't approve it.”

Dr. Joseph Obele, National Public Relations Officer of PETROAN, revealed that the association has taken proactive steps to address fuel import concerns. Through its newly established trading branch, PETROAN submitted an import license application about a month ago.

Regarding the market dynamics, Obele described Dangote as a formidable competitor, willing to go to great lengths to establish market dominance. This assertion suggests that PETROAN views Dangote's pricing strategy as aggressive, prompting the association to explore alternative import options to ensure competitive pricing for its members.

“You should know that Dangote is just out to close all the doors and windows so that no person enters the market. He is determined to ensure that nobody enters the market as a competitor. We assure Nigerians that as soon as the regulatory agency approves our authority to import, this price of PMS that is causing pain to Nigerians right now will crash to the barest minimum,” Obele said.

“The product we are planning to import is one of the best products so far, far better than his (Dangote) own, but he is just telling Nigerians that any product that is coming into the country is not better than his own.

“We call on Nigerians to support the call for dismantling monopolies so that we can liberate the market; otherwise, we will remain in the trap we are. We are trapped at the moment; we are trapped with exploitation and the only way out of the trap is to dismantle every dimension of monopoly and we are calling on Nigerians to support us,” He added.