Nigeria’s monumental Dangote oil refinery, operational since January with a construction cost of $20 billion, poses a significant challenge to the European gasoline trade with Africa valued at $17 billion annually. The refinery, capable of processing up to 650,000 barrels per day, is poised to become the largest in both Africa and Europe upon reaching full capacity this year or next. This development marks a pivotal moment in Nigeria’s pursuit of energy self-sufficiency, as the nation heavily reliant on fuel imports due to inadequate refining capabilities stands to transform its energy landscape.
Europe, historically a major gasoline exporter to West Africa, particularly Nigeria, faces mounting pressure from Dangote’s refinery, which threatens to disrupt the gasoline trade dynamics. With a substantial portion of Europe’s gasoline exports directed to West Africa, refineries lacking the capability to meet stringent environmental standards for other markets are at risk of closure. Analysts project that 300-400,000 barrels per day of European refining capacity could face shutdowns amidst escalating global gasoline production levels. The evolving market conditions could prompt the conversion of refineries into storage terminals and expedite closures such as the UK’s Grangemouth and Germany’s Wesseling refineries, influenced by factors like oversupply concerns and shifting energy transition trends driving reduced fossil fuel demand.