Ghana could soon purchase petroleum products from Nigeria’s Dangote Oil Refinery once the facility operates at full capacity, the head of the country’s oil regulator announced on Monday.
Mustapha Abdul-Hamid, chairman of the National Petroleum Authority, Ghana, stated that this shift could eliminate monthly fuel imports from Europe, which currently cost $400 million. He spoke at the OTL Africa Downstream oil conference in Lagos, according to a report by Reuters.
“If the refinery reaches 650,000 bpd a day capacity, all that volume cannot be consumed by Nigeria alone, so instead of us importing as we do right now from Rotterdam, it will be much easier for us to import from Nigeria and I believe that will bring down our prices,” Hamid explained. He further noted that importing from Nigeria rather than Europe would lower the prices of other goods and services by cutting out freight costs.
Hamid also mentioned that African countries might eventually agree on a common currency to reduce demand for dollars.
Ghana’s economy, which grew by 6.9% year-on-year in the second quarter of 2024, has largely benefited from a strong expansion in the extractive sector, driving up fuel demand.
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The Dangote Oil Refinery, built by Nigerian billionaire Aliko Dangote, began releasing Premium Motor Spirit (petrol) into the Nigerian market on September 15, 2024. However, despite this, marketers in Nigeria have started importing petrol in significant quantities due to the complete deregulation of the downstream oil sector by the Federal Government.
Hamid said, “If the refinery reaches 650,000 bpd a day capacity, all that volume cannot be consumed by Nigeria alone.” He emphasized the advantages of importing from Nigeria, asserting it would be easier and more cost-effective.
The Dangote refinery is expected to operate at near full capacity by the end of the year, with analysts predicting full operations by the first quarter of 2025.
Hamid stated that removing the need for European imports could result in lower prices across various sectors.
At the conference, Farouk Ahmed, Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, confirmed that the Dangote refinery would significantly enhance fuel supply once it is fully completed and licensed.
“Dangote Petroleum Refinery and Petrochemical Limited came on stream in February 2024 for the production of some petroleum products such as automotive gas oil and aviation fuel,” Ahmed said.
He added, “The refinery commenced production and supply of Premium Motor Spirit in September 2024. It is expected that supply from the factory will improve significantly when it is fully completed and licensed.” The refinery has already begun supplying diesel and aviation fuel to both domestic and international markets since its operations started in February.
Ahmed urged stakeholders to establish a comprehensive domestic pricing framework for Liquefied Petroleum Gas (LPG) to make it more accessible and affordable for consumers.
“NMDPRA will engage stakeholders in the development of a domestic LPG pricing framework to make the product readily available and affordable for the consumers,” he said.
He also highlighted the government’s commitment to liberalizing the energy market through robust policies and incentives to attract investment from both domestic and international companies.
“Nigeria is poised to actualise the targets of 2 million barrels per liquid oil production, the projected 10 billion standard cubic feet of gas target for domestic utilisation, and a robust domestic refining capacity, leading Nigeria to become a net exporter of petroleum products,” Ahmed concluded.
