Economy
Cheap, Toxic Petroleum Products From Russia Flooding African Markets—Dangote
By Aduragbemi Omiyale
Foremost Nigerian businessman, Mr Aliko Dangote, has climbed to the rooftop to alert over the growing influx of discounted, low-quality fuel originating from Russia, blended with Russian crude under price caps and dumped in African markets.
He, therefore, called on African governments to follow the example of the United States, Canada, and the European Union, which have implemented protective measures for domestic refiners.
“We are now facing increasing dumping of cheap, often toxic, petroleum products—some of which are blended to substandard levels that would never be allowed in Europe or North America,” Mr Dangote lamented at the West African Refined Fuel Conference held in Abuja.
The crude oil refinery owner in Lagos said due to the continent’s limited domestic refining capacity, Africa imports over 120 million tonnes of refined petroleum products annually, at a cost of approximately $90 billion.
“As we speak today, we buy 9 – 10 million barrels of crude monthly from US and other countries. I must thank NNPC for making some cargoes of Nigerian crude available to us from start of production to date,” he disclosed at the event organised by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and S&P Global Commodity Insights.
While appreciating the Nigerian National Petroleum Company (NNPC) Limited for making some cargoes of Nigerian crude available to his facility from start of production to date, he revealed that the company, monthly import between 9-10 million barrels of crude from the United States of America and other countries.
According to him, despite producing around 7 million barrels of crude oil per day, Africa only refines about 40% of its 4.3 million barrels daily consumption of refined products domestically. In stark contrast, Europe and Asia refine over 95 per cent of what they consume.
“So, while we produce plenty of crude, we still import over 120 million tonnes of refined petroleum products each year, effectively exporting jobs and importing poverty into our continent. That’s a $90 billion market opportunity being captured by regions with surplus refining capacity. To put this in perspective: only about 15 per cent of African countries have a GDP greater than $90 billion. We are effectively handing over an entire continent’s economic potential to others—year after year,” he said.
While reaffirming his belief in the power of free markets and international cooperation, Mr Dangote emphasised that trade must be grounded in economic efficiency and comparative advantage — not at the expense of quality or safety standards.
He stressed that, “it defies logic and economic sense for Africa to be exporting raw crude only to re-import refined products—products we are more than capable of producing ourselves, closer to both source and consumption.”
Reflecting on the experience of delivering the world’s largest single-train refinery, the industrialist also highlighted a range of challenges faced, including technical, commercial, and contextual hurdles unique to the African landscape.
Africa’s wealthiest man described building refineries such as the Dangote Petroleum Refinery as one of the most capital-intensive and logistically complex industrial facilities ever constructed. The Dangote refinery project, he said, required clearing 2,735 hectares of land (seven times the size of Victoria Island), of which 70 per cent was swampy, requiring the pumping of 65 million cubic metres of sand to stabilise the site and raise it by 1.5 metres, over 250,000 foundation piles, and millions of metres of piping, cabling, and electrical wiring among others.
“At peak, we had over 67,000 people on-site of which 50,000 are Nigerians, coordinating around the clock across hundreds of disciplines and nationalities. Then, of course, came the COVID-19 pandemic which set us back by two years and brought new levels of complexity, disruption, and risk. But we persevered,” he noted.
The refinery also required the construction of a dedicated seaport, as existing Nigerian ports could not handle the size and volume of equipment required. This included over 2,500 pieces of heavy equipment, 330 cranes, and even the establishment of the world’s largest granite quarry, with a production capacity of 10 million tonnes per year.
“In short, we didn’t just build a refinery—we built an entire industrial ecosystem from scratch,” he said.
Despite the refinery’s technical success, Dangote identified significant commercial challenges, particularly exchange rates which have gone from N156/$ at inception to N1,600/$ at completion, and challenges around crude oil sourcing. Although Nigeria is said to produce about 2 million barrels per day, the refinery has struggled to secure crude at competitive terms.
“Rather than buying crude oil directly from Nigerian producers at competitive terms, we found ourselves having to negotiate with international trading companies, who were buying Nigerian crude and reselling it to us—with hefty premiums, of course.
“Logistics and regulatory bottlenecks have also taken a toll. Port and regulatory charges reportedly account for 40 per cent of total freight costs, sometimes costing two-thirds as much as chartering the vessel itself.
“Refiners in India, who purchase crude oil from regions even farther away, enjoy lower freight costs than we do right here in West Africa because they are not saddled with exorbitant port charges,” Mr Dangote said.
He added that, in terms of port charges, it is currently more expensive to load a domestic cargo of petroleum products from the Dangote Refinery, as customers pay both at the point of loading and at the point of discharge. In contrast, when they load from Lomé, which competes with them, they pay only at the point of discharge.
Dangote further criticised the lack of harmonised fuel standards across African nations, which creates artificial barriers for regional trade in refined products.
“The fuel we produce for Nigeria cannot be sold in Cameroon or Ghana or Togo, even though we all drive the same vehicles. This lack of harmonisation benefits no one—except, of course, international traders, who thrive on arbitrage. For local refiners like us, it fragments the market and imposes unnecessary inefficiencies.”
Mr Dangote, stating the challenge with diesel production in Africa, noted, “To give one example, the diesel cloud point for Nigeria is 4 degrees. Without going into the technical details, this means that the diesel should work at a temperature of 4 degrees centigrade. Achieving this comes at a cost to us and limits the types of crude we could process. But how many places in Nigeria experience temperatures of 4 degrees? Other African countries have a more reasonable range of 7 to 12 degrees. This is a low hanging fruit which could be addressed by the regulators.”
By Adedapo Adesanya
The Nigeria Customs Service (NCS) is seeking a reduction in import duty exemptions, which rose to N34 trillion, limiting its ability to increase its revenue generation threshold.
The Comptroller-General of the Customs Service, Mr Adewale Adeniyi, disclosed that the value of import duty exemption certificate approvals increased to that level in 2025, describing the policy as one of the major factors restricting its revenue generation.
At an investigative session of the Senate Committee on Finance with revenue-generating agencies in Abuja on Monday, Mr Adeniyi explained that government fiscal policies have continued to impact the revenue-generating capacity of the Customs Service, both positively and negatively.
“The NCS would have generated significantly higher revenue over the years if not for government-approved import duty waivers and other external factors affecting collections,” he said.
He added that the Import Duty Exemption Certificate scheme, introduced in March 2020, accounted for about N34 trillion in approvals in 2025, with nearly 60 per cent covering duty-free importation of military hardware due to Nigeria’s prevailing security challenges.
Other government-backed duty waivers, he noted, covered the importation of Compressed Natural Gas (CNG), electric and hybrid vehicles, healthcare equipment and medical supplies, industrial machinery and manufacturing inputs, as well as food import intervention programmes.
While acknowledging the impact of the waivers on Customs revenue, Mr Adeniyi argued that fiscal policy should not be assessed solely on the basis of revenue generation but also on its broader economic and social objectives.
He, however, urged the federal government to establish stronger monitoring mechanisms to ensure beneficiaries of duty waivers deliver the intended economic outcomes, including lower consumer prices, increased local production and improved healthcare access.
The committee also expressed displeasure over the absence of several heads of government agencies invited to the hearing, including the Nigerian Civil Aviation Authority (NCAA), Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Industrial Training Fund (ITF), and the Federal Medical Centre (FMC), Jabi.
The Chairman of the Senate Committee on Finance, Mr Sani Musa, warned that the affected chief executives must appear at the committee’s next sitting or face severe sanctions under the Senate’s rules.
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By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange rose by 0.40 per cent on Monday, July 13, buoyed by buying interest in 11 Plc, Central Securities Clearing System (CSCS) Plc and UBN Property Plc, which offset the profit-taking in Food Concepts Plc, the parent company of Chicken Republic.
11 Plc gained N20.69 to end at N227.64 per share compared with last Friday’s price of N206.95 per share, CSCS Plc grew by N1.83 to N91.48 per unit from N89.65 per unit, and UBN Property Plc added 1 Kobo to sell at N1.81 per share versus N1.80 per share.
On the flip side, Food Concepts Plc depreciated by 24 Kobo to close at N2.45 per unit, in contrast to the preceding session’s N2.69 per unit.
As a result, the market capitalisation increased by N9.2 billion to N2.587 trillion from N2.578 trillion, and the NASD Security Index (NSI) improved by 15.33 points to 4,311.67 points from 4,296.34 points.
Yesterday, the volume of securities traded by investors surged by 615.9 per cent to 9.1 million units from the previous 1.3 million units, and the value of securities rose by 997.1 per cent to N320.4 million from the preceding session’s N29.2 million, while the number of deals decreased by 12.5 per cent to 28 deals from last Friday’s 32 deals.
At the close of trades, Great Nigeria Insurance (GNI) Plc remained the most active stock by value on a year-to-date basis, with 3.4 billion units valued at N8.4 billion, followed by Infrastructure Credit Guarantee (Infracredit) Plc with 2.3 billion units worth N6.5 billion, and CSCS Plc with 73.9 million units exchanged for N5.2 billion.
GNI Plc also closed the session as the most traded stock by volume on a year-to-date basis, with 3.4 billion units sold for N8.4 billion, followed by Infracredit Plc with 2.3 billion units traded for N6.5 billion, and Resourcery Plc with 1.1 billion units transacted for N415.7 million.
