On August 26, 2025, a virtual webinar hosted by the Major Oil Marketers Association of Nigeria (MEMAN) and S&P Global Commodity Insights (Platts) highlighted the transformative impact of the Dangote Refinery on Nigeria’s downstream sector and West Africa’s fuel landscape. Nigeria’s gasoline import volumes have significantly declined as the 650,000 barrels-per-day (bpd) refinery, which reached full operational capacity in 2024, ramps up domestic production, reducing the country’s long-standing reliance on costly imports. According to fresh data from S&P Global Commodity Insights (Commodities at Sea), this shift is altering regional trade flows, with fewer international cargoes arriving at Nigerian ports and growing potential for exports to neighboring markets. However, industry experts caution that West Africa will continue to rely on fuel imports due to potential supply disruptions, as evidenced by a recent Fluid Catalytic Cracker (FCC) outage at the refinery. This article explores the refinery’s impact, the evolving dynamics of West African trade, the role of Lomé as a regional trading hub, and the broader implications for Nigeria’s energy security and economic stability.
The Dangote Refinery: A Game-Changer for Nigeria
The Dangote Refinery, located in Ibeju-Lekki, Lagos, represents a monumental achievement for Nigeria’s energy sector. Commissioned in January 2024 and reaching full capacity later that year, the 650,000 bpd facility is the largest single-train refinery in the world. Built by Africa’s richest man, Aliko Dangote, at a cost of over $20 billion, the refinery has fundamentally altered Nigeria’s downstream sector, which has historically been constrained by a lack of refining capacity. Despite being Africa’s largest oil producer, Nigeria has relied heavily on imported petroleum products due to the prolonged shutdown of its state-owned refineries, costing the country billions in foreign exchange annually.
Fresh figures from S&P Global Commodity Insights indicate a steady decline in gasoline imports since 2024, as the Dangote Refinery’s output increasingly meets domestic demand. The facility’s ability to produce gasoline, diesel, jet fuel, and other refined products has enhanced fuel availability, reduced pressure on foreign exchange reserves, and positioned Nigeria as a potential net exporter of petroleum products. This milestone marks a significant step toward energy self-sufficiency, aligning with the government’s broader goal of economic diversification and resilience.
The refinery’s impact extends beyond gasoline. Its production of diesel and jet fuel has bolstered regional supply chains, with trade statistics reflecting increased domestic output. Energy analysts predict that if the current momentum continues, Nigeria could emerge as a net exporter of refined products, strengthening national energy security and reducing dependence on volatile global markets. This shift is particularly significant given Nigeria’s abundant crude oil resources, which have historically been exported raw due to limited refining capacity.
Transforming West African Trade Dynamics
The Dangote Refinery’s operational success is reshaping trade flows across West Africa, a region heavily reliant on imported fuels. Historically, West Africa has been a major destination for European gasoline exports, particularly lower-quality blends that do not meet stricter environmental standards in Europe. In 2023, approximately one-third of Europe’s 1.33 million bpd gasoline exports went to West Africa, with Nigeria accounting for the majority, according to Kpler data. This trade, valued at $17 billion annually, has been disrupted by the refinery’s ability to supply domestic and regional markets, reducing the need for international cargoes.
The webinar, titled “West Africa’s Fuel Landscape,” highlighted the refinery’s role in keeping more gasoil within West Africa and enabling jet fuel exports to neighboring countries. This shift has reduced the volume of international cargoes docking at Nigerian ports, signaling a decline in import dependency. The increased availability of locally refined products is also creating opportunities for Nigeria to export to countries like Togo, Benin, and Ghana, potentially positioning Nigeria as a regional energy hub.
However, the transition is not without challenges. MEMAN, in collaboration with S&P Global Commodity Insights, cautioned that West Africa will continue to rely on fuel imports for the foreseeable future. A recent outage at the refinery’s Fluid Catalytic Cracker (FCC), a critical unit for gasoline production, underscored the vulnerability of domestic supply chains. “Dangote’s ramp-up is a game-changer, but it does not eliminate the need for imports. Refinery maintenance or outages can rapidly create supply gaps,” said Gary Clark, Associate Editorial Director for EMEA clean refined products at Platts. This disruption caused gasoline cracks to rise from $13 to $17 per barrel in August 2025, illustrating the refinery’s influence on global supply balances.
The Role of Lomé as a Regional Trading Hub
A key discussion point at the webinar was the emergence of Lomé, Togo, as a critical offshore trading hub for West Africa. Ogechi Nkwoji, MEMAN’s Head of Economic Intelligence, explained that the “ex-Lomé model” has become a pivotal mechanism for regional fuel distribution. Large vessels discharge fuel into floating storage off the coast of Lomé, from which smaller parcels are transferred to regional buyers, primarily Nigerian marketers. This model’s flexibility, enhanced security measures, and same-day trading options have made Lomé a benchmark for price discovery in the Gulf of Guinea.
The ex-Lomé model addresses longstanding bottlenecks in West Africa’s fuel supply chain, such as limited onshore storage capacity and inefficiencies at regional ports. By serving as a floating storage hub, Lomé enables efficient distribution to local consumers, particularly in Nigeria, which remains the region’s largest demand hub. The model’s success has prompted Platts to introduce new regional price assessments, including Free on Board (FOB) West Africa and Ship-to-Ship (STS) Lomé benchmarks, to better reflect trading realities in the region.
Lomé’s rise as a trading hub highlights the complex interplay of regional and global dynamics in West Africa’s energy sector. While the Dangote Refinery has reduced Nigeria’s reliance on imports, Lomé’s role ensures that the region maintains access to international markets, providing a buffer against supply disruptions. This dual structure—local production supplemented by strategic import hubs—enhances West Africa’s energy security while fostering competition and transparency in fuel pricing.
Global Implications and Market Dynamics
The Dangote Refinery’s impact extends beyond West Africa, influencing global energy markets, particularly in Europe. Matthew Tracey-Cook, Senior Price Reporter at Platts, noted that European gasoline exports to Nigeria have declined significantly since the refinery began operations. However, the FCC outage in August 2025 demonstrated the refinery’s influence on Atlantic basin dynamics, as global supply balances were disrupted, leading to a spike in gasoline cracks. This volatility underscores the interconnectedness of global energy markets and the refinery’s role as a key player.
Energy analysts predict that the refinery will displace approximately 260,000 bpd of gasoline flows from Europe to West Africa by 2026, further softening European crack spreads. This shift is already affecting European refineries, which face increased competition and stricter environmental regulations. Some refineries, such as the UK’s Grangemouth and Germany’s Wesseling, are at risk of closure due to the oversupply of gasoline and declining margins, according to industry experts.
The refinery’s ability to export jet fuel to West Africa and Northwest Europe further illustrates its global reach. By diversifying its markets, the refinery is reducing Nigeria’s dependence on foreign exchange for fuel imports while generating revenue through exports. This dual strategy strengthens Nigeria’s economic position and enhances its influence in global energy trade.
Challenges and the Need for Diversified Sourcing
Despite its achievements, the Dangote Refinery’s reliance on domestic crude and occasional imports, such as US West Texas Intermediate (WTI) and Brazilian grades, highlights the complexity of its operations. Domestic crude supply challenges, including oil theft and pipeline vandalism, have occasionally forced the refinery to import crude, increasing operational costs. The facility’s current capacity utilization, estimated at 85% in August 2025, reflects ongoing efforts to stabilize production and address maintenance issues.
MEMAN’s Executive Secretary, Clement Isong, emphasized the importance of maintaining multiple sourcing options to mitigate market shocks. “While the Dangote Refinery has bolstered supply security in the region, multiple sourcing options, regulatory clarity, and policy consistency remain essential to cushioning market shocks and drawing sustained investment into West Africa’s energy sector,” he said. This perspective underscores the need for a balanced approach that combines local production with strategic imports to ensure supply stability.
Regulatory clarity is another critical factor. The Nigerian government’s efforts to reform the downstream sector, including the Petroleum Industry Act (PIA) of 2021, have created a more favorable environment for investment. However, challenges such as inconsistent policies and bureaucratic delays continue to hinder progress. Ensuring a transparent and predictable regulatory framework will be essential for sustaining investor confidence and supporting the region’s energy transition.
Opportunities for Nigeria and West Africa
The Dangote Refinery’s success presents significant opportunities for Nigeria and West Africa. By reducing import dependency, the refinery is easing pressure on Nigeria’s foreign exchange reserves, which have been strained by the cost of importing fuel. The potential to export refined products to neighboring countries could generate additional revenue, strengthening Nigeria’s balance of trade and positioning it as a regional energy leader.
The refinery’s operations are also creating jobs and stimulating economic activity in Lagos and beyond. With a capacity to process 650,000 bpd, the facility employs thousands of workers and supports ancillary industries such as logistics, engineering, and manufacturing. These economic benefits align with the government’s broader goal of job creation and economic diversification, reducing reliance on crude oil exports.
For West Africa, the refinery’s exports of diesel and jet fuel are enhancing regional energy security, reducing dependence on European and other international suppliers. This shift could foster greater regional integration, as countries collaborate to develop shared infrastructure and trade networks. The emergence of Lomé as a trading hub further supports this trend, providing a flexible and efficient platform for regional fuel distribution.
The Path Forward: Sustainability and Collaboration
The webinar underscored the importance of sustainability and collaboration in West Africa’s energy sector. The Dangote Refinery’s focus on producing Euro-V quality fuels, which meet stringent environmental standards, aligns with global trends toward cleaner energy. By investing in technologies such as sulphur recovery and hydrogen generation, the refinery is reducing its environmental footprint, contributing to Nigeria’s climate goals.
Collaboration between stakeholders—government, private sector, and industry associations like MEMAN—is critical for sustaining the refinery’s impact. The government’s port modernization program, aimed at improving trade infrastructure, complements the refinery’s efforts by ensuring efficient logistics and export capabilities. Partnerships with international organizations, such as the International Maritime Organization (IMO), can further enhance Nigeria’s ability to integrate into global trade networks.
MEMAN’s commitment to market transparency and stakeholder education, as articulated by Isong, is a vital component of this ecosystem. By fostering dialogue and sharing data, MEMAN is building trust and encouraging investment in West Africa’s energy sector. The introduction of Platts’ regional price assessments is a step toward greater transparency, providing accurate benchmarks for traders and policymakers.
Conclusion
The Dangote Refinery’s ramp-up of domestic fuel production, as discussed during the MEMAN-Platts webinar on August 26, 2025, marks a transformative moment for Nigeria and West Africa. By significantly reducing gasoline import volumes, the refinery is enhancing energy security, easing foreign exchange pressures, and reshaping regional trade dynamics. The decline in international cargoes and the potential for exports to neighboring markets signal Nigeria’s emergence as a regional energy hub.
However, challenges such as supply disruptions, as evidenced by the FCC outage, highlight the need for diversified sourcing and regulatory clarity. Lomé’s role as a trading hub complements the refinery’s efforts, ensuring flexibility and resilience in the region’s fuel supply chain. The refinery’s global impact, including its influence on European markets, underscores its significance in the Atlantic basin.
As Nigeria continues to leverage the Dangote Refinery’s capabilities, collaboration, transparency, and sustainability will be key to sustaining its momentum. By addressing challenges and seizing opportunities, Nigeria is poised to strengthen its energy sector, drive economic growth, and lead West Africa toward a more secure and prosperous energy future.
