Nigerian billionaire Aliko Dangote’s refinery is witnessing a surge in inquiries as African nations move quickly to secure fuel supplies following disruptions caused by the Iran war.
According to a company executive, DangotePetroleum Refinery and Petrochemicals has received approaches from South Africa and several other countries.
People familiar with the matter said South Africa is pursuing a 12-month standard supply agreement with Nigeria, though they declined to be named because the discussions are private.
The broader global impact of the US-Israel conflict with Iran is becoming evident, with supply strains ranging from cooking gas shortages in India to declining naphtha availability in Japan.
In Africa, the pressure is particularly intense in eastern and southern regions, where roughly 75% of refined fuel imports originate from the Middle East, according to Elitsa Georgieva of energy consultancy CITAC.
South Africa said it is working with industry players to secure crude oil and refined products from multiple sources. “South Africa ‘is actively coordinating with industry stakeholders to secure both crude oil and refined petroleum products from a diversified range of sources,’” the government said in a statement on Wednesday. “A comprehensive plan is in place to manage potential supply risks.”
About 75% of the refinery’s 650,000 barrels-per-day output is allocated for domestic use in Nigeria, leaving the rest available for export. Ghana and Kenya have also contacted Dangote, one of the sources said.
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“Right now it is not about pricing, it’s about availability,” Dangote said in an interview with the Economist. “I think the situation will continue for a while.”
While South Africa indicated it has sufficient supply for the “coming weeks,” Kenya requires oil marketers to maintain at least three weeks’ worth of stock, with officials noting no immediate threat of shortages.
By comparison, the International Energy Agency recommends member countries hold reserves equivalent to at least 90 days of net oil imports. No African country belongs to the agency.
In Ethiopia, authorities have directed fuel stations to prioritise public transport and urged citizens to conserve energy. Meanwhile, in Mogadishu, fuel prices have nearly doubled.
South Africa holds about 8 million barrels of strategic crude reserves through the state-owned Central Energy Fund, but it lacks dedicated fuel stockpiles. Lawmakers previously flagged this gap.
The continent’s largest economy has seen its refining capacity shrink by roughly half in recent years due to accidents and prolonged underinvestment, increasing reliance on imports.
Jacob Mbele, director-general at South Africa’s Department of Mineral Resources, said fuel marketers maintain some buffer stocks. However, the government is still in the early stages of developing its own strategic reserves as the country has become a net importer of refined products.
Some companies are already adjusting to the situation. Demand for coal has climbed, with Exxaro Resources Ltd. reporting a roughly 20% increase in prices to $112 per ton, according to Chief Executive Officer Ben Magara.
Magara also noted rising freight and insurance costs for manganese shipments, along with potential disruptions to fuel supply across operations.
“Making sure we have enough fuel inventories for a crisis like this is also quite important,” Magara said. “So we are putting a lot of business continuity management plans in place because you just, you never know.”
(BLOOMBERG)















