Ghana Seeks Fuel Imports from Dangote Refinery

Ghana is exploring the option of sourcing petroleum products from Nigeria’s Dangote Petroleum Refinery, potentially reducing its reliance on costlier imports from Europe once the refinery reaches full operational capacity.

Mustapha Abdul-Hamid, Chairman of Ghana’s National Petroleum Authority, mentioned this development during the OTL Africa Downstream Oil Conference in Lagos on Monday, as reported by Reuters.

Abdul-Hamid highlighted that importing fuel from Dangote’s $20 billion refinery in Lekki, Lagos, could save Ghana around $400 million monthly, currently spent on fuel imports from Europe.

The refinery began supplying Premium Motor Spirit (PMS), also known as petrol, to Nigeria on September 15, 2024. However, following the deregulation of Nigeria’s downstream oil sector, local marketers have been importing substantial volumes of PMS.

The Ghanaian official pointed out that if Dangote’s refinery achieves its targeted production of 650,000 barrels per day (bpd), Nigeria would likely have surplus fuel, creating an opportunity for Ghana to import directly. “Instead of importing from Rotterdam, it would be much easier and likely cheaper to import from Nigeria, which could help bring down our fuel prices,” Abdul-Hamid explained.

The refinery, established by Nigerian billionaire Aliko Dangote, is expected to ramp up production toward full capacity by the end of 2024, with analysts projecting full operational status by early 2025.

Abdul-Hamid added that importing fuel from Nigeria could also reduce the costs of goods and services across Ghana by minimizing freight expenses. He expressed optimism about the prospect of a unified African currency, which could lessen reliance on the dollar.

Ghana’s economy, which recorded a 6.9% year-on-year growth in the second quarter of 2024, has been bolstered by strong performance in the extractive sector, which has driven fuel demand. In February 2024, the Dangote refinery released tenders for its first fuel exports, signaling the refinery’s readiness for the international market.

Earlier reports indicated delays in regulatory approval for other Dangote refinery products, such as aviation fuel and diesel. However, by October 2024, the Dangote refinery had commenced direct PMS supplies to oil marketers, bypassing the Nigerian National Petroleum Company Limited, marking a significant step in the refinery’s expansion in the market.