West Africa refinery capacity — why the region imports most of its own crude back as fuel

The refinery paradox

West Africa's refining deficit is not a new problem. The post-independence governments of the 1960s and 70s built refineries — Nigeria opened its Port Harcourt refinery in 1965, Ghana's Tema refinery opened in 1963, and Côte d'Ivoire's SIR in 1965 — but most were sized for domestic demand projections that proved optimistic, and were built with technology that is now several generations old.

Chronic under-investment followed. State oil companies lacked the capital for maintenance turnarounds, and governments were reluctant to raise fuel prices to generate refinery cash flow because retail fuel subsidies were politically untouchable. By the 2010s, the Nigerian National Petroleum Corporation's (NNPC) four refineries — Port Harcourt I and II, Kaduna, and Warri, with a combined nameplate capacity of 445,000 barrels per day — were producing almost nothing.

The IEA Africa Energy Outlook 2022 estimated that Africa as a whole had refining capacity of about 3 mb/d but actual throughput averaging under 1.5 mb/d, and that the continent was a net importer of refined products despite being a large crude exporter. The World Bank Africa region has documented the fiscal cost of this structural deficit extensively.

Nigeria: from NNPC to Dangote

Nigeria is the most dramatic case. Africa's largest crude producer — at over 1.5 mb/d in good years, though production has been hit by pipeline theft and under-investment — it spent decades importing virtually all its refined products. Petrol was subsidised at below-market prices, with the NNPC funded by government transfers to cover the difference. The subsidy removal in May 2023 under President Tinubu was one of the most significant economic policy decisions in Africa in years — petrol prices tripled overnight, triggering immediate inflation. See our Africa fuel smuggling article for context on the cross-border arbitrage that had grown up around the subsidy.

The Dangote Petroleum Refinery, located at Lekki Free Trade Zone in Lagos, represents the private sector response to this structural failure. With a nameplate capacity of 650,000 barrels per day, it is designed to process Nigerian crude and produce petrol, diesel, jet fuel, and petrochemicals for the Nigerian and export markets. Dangote Group invested over USD 19 billion — making it one of the largest private investments in African industrial history.

Ghana, Côte d'Ivoire, Senegal

Ghana's Tema Oil Refinery (TOR) has a nameplate capacity of 45,000 b/d but has operated at well below that for years due to financing constraints and crude supply issues. The National Petroleum Authority (NPA) sets Ghana's fuel prices monthly using an import parity formula — see our import parity price entry — which means Ghanaian pump prices closely track international product markets plus a freight component, regardless of TOR's output level. When Ghana's cedi depreciated sharply in 2022–2023, pump prices rose sharply in local currency terms even as USD crude prices stabilised.

Côte d'Ivoire's SIR refinery (65,000 b/d, Abidjan) is the most functional large refinery in West Africa by utilisation rate. It processes crude imported from multiple sources and supplies the domestic market plus landlocked neighbours Burkina Faso and Mali. TotalEnergies and Shell historically held equity in SIR, providing technical support and crude supply linkage.

Senegal brought its first offshore oil and gas production online at the Sangomar field in 2024, operated by Woodside Energy. This opens the possibility of domestic crude supply for the SAR refinery at Mbao (26,000 b/d), which currently processes imported crude. Senegal's government has signalled ambitions to build refining and petrochemical capacity to capture more value from its hydrocarbon endowment — a strategy similar to what Angola has pursued with its Lobito refinery expansion.

How the gap shows up in pump prices

The import dependency adds a structural cost layer on top of the international refined product price. A cargo of petrol loaded at Rotterdam or Mumbai for Lagos must cover:

• Ocean freight (Handysize or MR tanker): USD 2–4/bbl depending on vessel rates
• Insurance: USD 0.05–0.15/bbl
• Port charges (Apapa, Lagos): USD 1–2/bbl, including demurrage risk
• Import duty and levies: varies by country (Nigeria levied 0 % on petrol but 10 % on diesel historically)
• Distribution to inland markets (landlocked countries add USD 5–15/bbl trucking)

In aggregate, the "import premium" over the ARA spot price can be USD 5–15/bbl for coastal West African markets and USD 15–30/bbl for landlocked countries like Mali, Niger, or Chad. This goes directly into pump prices and explains why petrol in Bamako or N'Djamena costs materially more than in Abidjan or Lagos. Use the FuelTheGuide Explorer to compare West African country prices side by side.

Can the Dangote refinery change the picture?

If the Dangote refinery reaches sustained high utilisation — which depends on resolving the crude supply question and building out distribution infrastructure — it could fundamentally alter the regional fuel trade. Nigeria currently imports roughly 15–20 million litres per day of petrol alone. Domestically refined product at scale would eliminate the freight and import premium, reduce forex demand for product imports, and potentially create an export surplus for regional neighbours.

The African Development Bank's energy strategy and the IRENA Africa programme both highlight refining capacity as a prerequisite for stable retail fuel prices. The longer-term question — whether continued investment in fossil fuel refinery infrastructure makes sense given Africa's electrification aspirations — was central to the debates at the Africa Energy Forum 2024.

For the broader picture of fuel subsidy economics across Africa, see our fuel subsidy glossary entry and the Africa fuel smuggling article.