Why Dangote Is Still Importing Crude Oil: And Why It Should Concern All of Us

At a major energy conference in Abuja, Africa’s richest man, Aliko Dangote, opened up about a surprising challenge. Despite owning the continent’s biggest refinery, he’s still importing nearly 10 million barrels of crude oil every month from the U.S. and other countries. And it’s not cheap.

Speaking at the West African Refined Fuel Conference, organized by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and S&P Global, Dangote made it clear: they often have to buy Nigerian crude through foreign traders who mark up the price significantly.

This isn’t just a Dangote issue. It reflects a deeper problem across Africa. The continent produces plenty of crude oil but ships most of it overseas to be refined. Then it buys back the finished products at much higher prices.

According to Dangote, Africa is spending about $90 billion every year on imported refined petroleum products. That amount is more than the GDP of most African nations. He described it as exporting jobs and importing poverty.

Worse still, much of the imported fuel is substandard. Dangote pointed out that low-quality fuel blends, which would never be allowed in the U.S. or Europe, are now common across Africa.

Dangote’s refinery project is one of the most ambitious industrial developments in the world. Built on land equivalent to seven Victoria Islands, much of it swampy, the site had to be raised using 65 million cubic metres of sand. It required more than 250,000 foundation piles and millions of metres of piping and electrical wiring.

At its peak, over 67,000 people worked on-site, most of them Nigerians. The refinery even needed its own seaport because existing Nigerian ports couldn’t handle the size of the equipment being shipped in.

“We didn’t just build a refinery,” Dangote said. “We built an entire industrial ecosystem.”

Getting the refinery built was only half the challenge. Running it has introduced its own set of problems. When the project started, the exchange rate was around ₦156 to the dollar. By the time it was completed, it had skyrocketed to ₦1,600.

Even more frustrating is the difficulty of securing Nigerian crude oil at competitive rates. Instead of buying directly from local producers, Dangote Refinery often has to purchase from international middlemen, making the process more expensive. As a result, they’re still relying heavily on imported crude.

To be fair, Dangote acknowledged the Nigerian National Petroleum Company (NNPC) for supplying some crude during the early days of production, which helped get operations moving.

Another major obstacle is the high cost of logistics. Dangote said port charges in Nigeria can consume up to 40 percent of total freight expenses. In some cases, loading petroleum at the Dangote Refinery costs more than loading it from Lomé in Togo. That’s because in Nigeria, customers pay fees at both the loading and offloading points, while in Lomé, there is only one charge.

Adding to the problem is the lack of consistent fuel standards across African countries. Fuel made for Nigeria often cannot be sold in nearby countries like Ghana, Togo, or Cameroon, even though they all use similar types of vehicles. This inconsistency creates barriers to regional trade and benefits only international traders who exploit the confusion.

Dangote also raised concerns about low-cost fuel from Russia, which is often dumped into African markets under global price cap arrangements, further hurting local refiners.

“We’re not asking for special treatment,” he said. “Just a fair and competitive environment.”

For Africa to truly unlock the potential of its natural resources, he argued, it must stop exporting raw crude only to re-import refined products. The solution lies in building and supporting the capacity to refine at home.