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 Dipo Olowookere
A 0.38 per cent loss was suffered by Nigerian stocks on Tuesday on the back of continued selling pressure from investors embarking on profit-taking.
Data from the Nigerian Exchange (NGX) Limited showed that the contraction was influenced by the 1.78 per cent decline recorded by the insurance sector, the 0.24 per cent slip printed by the consumer goods index, and the 0.09 per cent drop posted by the energy space, offsetting the 0.75 per cent growth achieved by the banking sector and the 0.21 per cent growth recorded by the industrial goods segment.
Investor sentiment was weak during the trading day, as the bourse ended with 13 price gainers and 40 price losers, representing a negative market breadth index.
LivingTrust Mortgage depreciated by 10.00 per cent to N3.42, Multiverse also shed 10.00 per cent to N22.95, McNichols dropped 9.92 per cent to N5.45, Thomas Wyatt dipped by 9.87 per cent to N3.56, and Eterna lost 8.57 per cent to trade at N33.00.
On the flip side, AVA Capital improved by 9.94 per cent to N9.95, Livestock Feeds expanded by 9.71 per cent to N8.65, Neimeth increased by 8.43 per cent to N9.00, AIICO gained 3.47 per cent to settle at N4.18, and Oando grew by 3.30 per cent to N36.00.
A total of 1.6 billion equities valued at N28.7 billion exchanged hands in 54,160 deals yesterday versus the 923.0 million equities worth N37.9 billion traded in 72,544 deals on Monday, indicating a 73.35 per cent surge in the trading volume, a 24.27 per cent decline in the trading value, and a 25.34 per cent slip in the number of deals.
The busiest stock was Japaul, which transacted 904.4 million units for N2.7 billion. Sterling Holdings sold 54.0 million units valued at N431.9 million, FCMB exchanged 49.5 million units worth N545.9 million, Chams traded 44.9 million units for N199.2 million, and Neimeth sold 42.4 million units worth N327.8 million.
Business Post reports that the All-Share Index (ASI) gave up 927.70 points to 244,802.83 points from 245,730.53 points, and the market capitalisation receded by N599 billion to N158.016 trillion from N158.615 trillion.
By Adedapo Adesanya
The Naira put up a better performance against the United States Dollar in the various segments of the foreign exchange (FX) market on Tuesday, August 4.
In the parallel market, it improved its value by N5 to settle at N1,400/$1 compared with the previous day’s value of N1,405/$1, and at the GTBank forex desk, it appreciated by N1 to close at N1,373/$1, in contrast to the preceding session’s N1,374/$1.
In the Nigerian Autonomous Foreign Exchange Market (NAFEX) segment, the Nigerian currency gained N2.28 or 0.17 per cent against the greenback to quote at N1,362.55/$1 compared with the N1,364.83/$1 it was exchanged a day earlier.
Also in the official market, the local currency appreciated against the Pound Sterling during the session by N6.48 to finish at N1,831.41/£1 versus N1,837.89/£1, and chalked up N5.22 on the Euro to sell at N1,568.71/€1 versus N1,573.93/€1.
Interbank FX transactions increased 14 per cent day-on-day as market makers’ activities raised total Dollar volume exchanged to $156.23 million, more than 132 per cent above $137.05 million in turnover at the previous close.
The interbank FX turnover rose despite a marginal rise in deals at the NFEM window as data from the central bank put Tuesday’s quote at 139 from 138.
As for the cryptocurrency market, major tokens were mixed as global stock indexes hit fresh records on renewed enthusiasm for artificial-intelligence-related shares.
With cheaper oil, easing rate expectations and a strong risk-on rally in equities supporting digital assets, analysts say crypto appears to be driven by internal market dynamics rather than macroeconomic factors, even as traders watch for a potential Strait of Hormuz deal.
It was reported overnight that Iran and Oman were close to an agreement to reopen the Strait of Hormuz, with an announcement targeted for Wednesday.
Binance Coin (BNB) grew by 1.8 per cent to $600.54, Bitcoin (BTC) rose by 0.9 per cent to $64,199.86, Solana (SOL) jumped by 0.8 per cent to $73.95, and Ethereum (ETH) advanced by 0.7 per cent to $1,867.21.
But Cardano (ADA) depreciated by 1.9 per cent to $0.1908, TRON (TRX) dipped by 0.6 per cent to $0.3268, Dogecoin (DOGE) slumped by 0.5 per cent to $0.0698, and Ripple (XRP) crashed by 0.4 per cent to $1.06, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) traded flat at $1.00 apiece.
By Adedapo Adesanya
Brent crude dropped below $80 per barrel, precisely losing $4.41 or 5.3 per cent to settle at $79.36 a barrel on Tuesday, after comments by officials from the United States and Qatar raised hopes for a diplomatic resolution to the Iran war, which could improve oil flows through the Strait of Hormuz.
Also, the US West Texas Intermediate (WTI) futures depreciated by $4.57 or 5.7 per cent to trade at $75.77 a barrel.
US Secretary of State Marco Rubio said on Tuesday there was progress in talks with Iran and Oman about moving more ships through the strait, but a final agreement was yet to be reached.
Also, Treasury Secretary Scott Bessent had said earlier on Tuesday that a deal with Iran to reopen the strait could come as soon as Tuesday or Wednesday.
Qatar’s Foreign Ministry spokesperson Majed al-Ansari said efforts to secure a diplomatic resolution to the war were continuing.
Qatar said it has discussed with US President Donald Trump ways to reduce escalation and converge viewpoints between the US and Iran.
Meanwhile, the latest round of US-facilitated talks between Israel and Lebanon began on Tuesday and will continue through Thursday.
Amid this, Iran still wants control over inbound shipping and visibility over outbound traffic through the Strait of Hormuz, with the ability to intervene if necessary, as part of a plan being discussed with Oman to reopen the strategic waterway.
Market analysts noted that the prospect of a diplomatic solution to the conflict has helped remove some of the geopolitical risk premium in oil prices. If negotiations between the US and Iran make meaningful progress, the market could continue pricing in a lower probability of supply disruptions.
Disruptions to shipping through the strait, through which a fifth of global oil and gas flowed before the war, have forced Middle Eastern nations to cut oil output sharply. The world has lost more than 2.6 billion barrels of oil since the Iran war began in February.
Shipping traffic at the key Gulf waterways of Bab el-Mandeb and the Strait of Hormuz remained unchanged at the start of the week.
The American Petroleum Institute (API) estimated that crude oil inventories in the US rose by 2.69 million barrels in the week ending July 30. Commercial crude oil inventories excluding the SPR have lost just over 58 million barrels over the last sixteen weeks, with US crude inventories down just 7.2 million for the year, according to API data.
Official data from the US Energy Information Administration (EIA) will be released later on Wednesday.
