The military conflict in the Middle East has triggered a sharp rise in demand for petrol from the Dangote Refinery as African countries scramble for alternative fuel supplies amid disruptions to global trade routes.
With crude oil prices climbing toward $120 per barrel and attacks on vessels in the Strait of Hormuz threatening shipments, the 650,000-barrel-per-day facility on the outskirts of Lagos has become a critical supplier for nations across the continent that previously relied on imported refined products.
In an interview with The Economist, Aliko Dangote, president of the Dangote Group, described the situation as “a crazy situation right now,” adding that he expected the volatility to continue. “And I think it will continue for a while,” he said.
The company announced a price increase on Friday, raising its ex-depot price from N1,175 to N1,245 per litre, while the coastal price rose from N1,512,648 to N1,606,518 per metric tonne. The new pricing, which took effect at midnight on March 21, was attributed to rising geopolitical tensions and higher crude oil costs.
Dangote said demand from other African countries had surged dramatically as supply chains tightened. “People are ready to pay anything now,” he said.
The refinery’s emergence as a key supplier comes as the United States and its allies intensify military operations against Iran. President Donald Trump said Friday that the US was “very close” to achieving its objectives in the war and signalled a possible winding down of military operations.
In a post on Truth Social, Trump listed what he described as major gains, including the degradation of Iran’s missile capabilities, the destruction of its defence industrial base, and the elimination of its navy and air force. He also called on countries that rely on the Strait of Hormuz to take responsibility for its security.
“The Hormuz Strait will have to be guarded and policed, as necessary, by other Nations who use it — The United States does not!” Trump wrote.
The British government on Friday authorised the United States to use military bases in Britain to carry out strikes on Iranian missile sites that have been attacking ships in the strait. A Downing Street statement said the agreement for US use of UK bases includes defensive operations to degrade the missile sites and capabilities targeting vessels in the waterway.
Trump also criticised NATO allies for their lack of support in the conflict, calling them “cowards” in a social media post. He said NATO countries refused to join the fight against Iran but continued to complain about high oil prices.
“Cowards, and we will Remember!” he wrote.
For Nigeria, Dangote said the refinery had helped prevent a major fuel crisis. “Nigeria would have been at a standstill now without the refinery,” he said, noting that the facility had reduced the country’s reliance on imported petroleum products and eased pressure on foreign exchange reserves.
He framed the refinery as part of a broader push for African industrialisation. “If we Africans don’t lead in the industrialisation of Africa, Africa will never industrialise,” he said.
Dangote expressed doubt that other African countries would be able to undertake similar large-scale projects, citing the high cost and limited appetite for investment. “I can’t see any African country today building a refinery, and if they tried, I wish them best of luck,” he said. “Africans generally might not have this kind of capital. Even when they have, they don’t want to invest. They are scared about investing. We are not.”
The refinery is part of a massive industrial complex with extensive storage capacity and dedicated port infrastructure. Dangote noted its scale, saying, “Actually we are building a runway there. Nobody believes something like this exists in Africa. We can fly in people to come and have a look.”
He outlined plans to expand refining capacity over the next three years and to list part of the business on the Nigerian Exchange and possibly the London Stock Exchange. He also intends to use gas from the complex to provide power for manufacturers that could set up nearby.
The Dangote Group already operates in 16 other African countries. Last year, it announced a $2.5 billion joint venture with Ethiopia to build a fertiliser plant. Dangote said he would invest another $1 billion in cement and power projects in Zimbabwe. He also mentioned plans for potash and phosphate mining, copper processing in Zambia, cocoa processing in Ghana and Ivory Coast, and a petroleum pipeline from Namibia to central Africa.
While the refinery relies heavily on foreign technical expertise—most of its managers are Indian, and its cement business has a long relationship with China’s Sinoma—Dangote defended the operation. “We are very, very innovative,” he said, pointing to advanced automation in both refining and cement production.
As the conflict in the Middle East continues to disrupt global energy supplies, the Dangote Refinery has found itself positioned as a critical supplier for a continent long dependent on imported fuel. Whether this moment translates into lasting industrial transformation remains to be seen, but for Dangote, the path forward is clear.
“We know that if we don’t invest, there’s nobody that will come and invest in our continent,” he said.
Discussion about this post