In the nearest future, volume consuming nations like Nigeria and other African countries will remain major importers of refined products due to the lack of new refining projects on the continent.
The executive secretary of the African Refiners and Distributors Association (ARDA), Anibor Kragha, said this in an interview with S&P Global Commodity Insights. Kragha said that the major refining projects include the Dangote refinery in Nigeria with a planned capacity of 650,000 b/d and Cabinda in Angola with capacity of 60,000 b/d.
The phase one of the Dangote refinery is expected to be completed in the first quarter of 2024 while phase one of the Cabinda refinery will be completed by the end of 2024. These projects are expected to boost energy security and reduce importations. Kragha said thay ARDA also supported other projects, including the Tema refinery in Ghana coming back on stream to further help security of supply in the region.
Beyond refining capacity, Kragha said there is need for a strategic discussion on storage and distribution of assets in Africa, and which projects should receive investment. Market instability in Africa is also an issue facing refiners and governments. For instance, in Nigeria, domestic petrol prices recently skyrocketed following the removal of costly subsidies on imported gasoline.
Kragha said that the removal of the subsidy reveals the actual fuel consumed in Nigeria, ending a booming illicit petrol market in nearby countries like Togo, Benin and Niger. African officials are also looking to include cleaner fuels in development plans for future processing capacity.