No debate, Dangote Refinery has reshaped the global refining equilibrium: “The global refining industry is on the verge of a profound transformation, driven by the emergence of Nigeria’s Dangote Oil Refinery and Mexico’s Dos Bocas Refinery. Both projects are set to significantly alter the fuel markets in Africa, Latin America, and beyond, challenging the established dominance of refineries in Europe and the United States….Organization of Petroleum Exporting Countries (OPEC)’s recently published 2024 World Oil Outlook 2050 highlighted the scale of disruption these refineries are poised to cause. ”
“The start-up of the Dangote refinery in Nigeria and the upcoming commercial start of the Dos Bocas refinery in Mexico could significantly affect the gasoline market in the Atlantic basin. This in turn could negatively affect refineries in the US and especially Europe, as gasoline markets in these regions are stagnating,” OPEC’s report states.
The Dangote refinery, which will soon be operating at full capacity, is expected to meet not only Nigeria’s domestic fuel needs but also supply markets across West Africa. This ambitious project has been touted as the game-changer Africa needs to reduce its dependence on imported fuel, especially gasoline. Once operational at full throttle, the refinery is expected to transform trade flows across the Atlantic.
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Also, the Dos Bocas refinery in Mexico is expected to make Mexico self-sufficient in refined petroleum products, reducing the country’s reliance on imports from the U.S. The combined impact of these two mega-refineries will be felt across the Atlantic basin, where refineries in Europe and the U.S. could face significant challenges in maintaining market share.
“The Dangote refinery will soon rival the largest refining sites in the US and it is more than 50% larger than Europe’s biggest refinery,” NJ Ayuk, Executive Chairman of the African Energy Chamber, remarked.
Ayuk further noted, “Refinery ramp-ups can be tricky, and there will be delays. But once the site starts operating at full capacity, it will transform fuel markets in the West African region and change trade flows in Europe. In other words, Nigerian refined products will soon be making their way into Northwest Europe, traditionally an exporter. Then there’s feedstock. Once the Dangote refinery will be purchasing at full throttle, there will be less crude in the Atlantic basin, notably in Europe.”
Good People, the Nigerian government should classify Dangote Refinery as a national strategic asset with all protections and support because with Dangote Refinery, Nigeria has the potential to avert a lost decade.
I praise Dangote for not listening to those telling us that refineries are bad for the climate even when they have not closed the ones in their yards. Africa needs more refineries because we need energy to industrialize! We just need better technologies to make the energy systems more efficient and less harmful to the climate, but we need energy.
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