Nigerian billionaire Aliko Dangote’s refinery is receiving a surge of inquiries as African governments scramble to secure fuel supplies amid disruptions triggered by the US-Israel war on Iran.
Dangote Petroleum Refinery and Petrochemicals has been approached by South Africa and several other countries, a company executive confirmed.
South Africa is reportedly seeking a standard 12-month supply contract with Nigeria, according to people familiar with the discussions who requested anonymity.
The conflict, which began on February 28, has disrupted global trade, particularly due to Iran’s blockade of the Strait of Hormuz. The resulting shocks are being felt worldwide, from cooking gas shortages in India to dwindling naphtha supplies in Japan, highlighting vulnerabilities across the global energy market.
Africa’s fuel vulnerability
African nations are among those most affected. East and Southern Africa are particularly exposed, with roughly 75% of refined-fuel imports coming from the Middle East.
In South Africa, the National Treasury recently warned it has limited capacity to shield consumers from rising prices. Crude oil costs have surged more than 40%, topping $100 per barrel, while disruptions in shipping and production ripple across the continent.
Ethiopia has urged citizens to reduce fuel consumption amid the supply crunch.
At Dangote’s 650,000 barrel-per-day refinery, about 75% of output is reserved for Nigeria, leaving the remainder available for export. Ghana and Kenya have also reportedly reached out. “Right now it is not about pricing, it’s about availability,” Dangote told The Economist. “I think the situation will continue for a while.”
While South Africa says its fuel supply is adequate for the coming weeks, Kenya requires oil marketers to maintain at least three weeks of stock. For context, the International Energy Agency (IEA) requires member countries to hold a minimum of 90 days of net oil imports, but no African nation is currently part of the global watchdog.
