- Ghana plans to source fuel from Nigeria’s Dangote refinery to cut its $400 million monthly fuel import bill and reduce reliance on European suppliers.
- Proximity to the Dangote refinery could lower transport costs, reduce fuel prices, and ease consumer expenses on essential goods.
- The partnership could strengthen West African energy integration, position Nigeria as a critical regional supplier, and reduce the need for foreign currency in fuel transactions.
Ghana seeks to cut its $400 million monthly fuel import bill by sourcing petroleum products from Nigeria’s Dangote refinery. The plan targets reducing reliance on European suppliers, whose high shipping costs, especially from Rotterdam, significantly impact Ghana’s fuel expenses.
During the OTL Africa Downstream conference in Lagos, Mustapha Abdul-Hamid, President of Ghana’s National Petroleum Authority (NPA), outlined the strategy. He explained that the Dangote refinery, with a capacity of 650,000 barrels per day (bpd), presents a regional supply option. Abdul-Hamid believes sourcing fuel from the refinery will lower Ghana’s costs and offer protection from international price fluctuations.
Nigeria’s proximity would help Ghana reduce transport costs, which currently drive up prices due to extended shipping routes from Europe. This shift could lead to lower fuel prices in Ghana and reduce the costs of essential goods affected by fuel expenses.
The Dangote refinery aims to reach total capacity by early 2025. In addition to supplying Nigeria, it plans to serve several African markets, including Ghana. By tapping into this regional fuel source, Ghana expects to cut its reliance on foreign currency for energy transactions, a key concern for many African countries with limited reserves.
Abdul-Hamid stressed that a regional fuel supply could enhance Ghana’s economic stability. He highlighted the benefits of leveraging regional infrastructure for more efficient energy management, reducing the country’s vulnerability to external market pressures.
Beyond Ghana, the Dangote refinery strengthens Nigeria’s role as a critical fuel supplier in West Africa. This aligns with the Economic Community of West African States (ECOWAS) goals to boost regional energy integration. A stable regional energy network would help West African countries lower costs by reducing dependence on overseas markets.
Abdul-Hamid also touched on the potential to reduce the use of foreign currency for intra-African energy transactions. He mentioned the possibility of a typical African currency for energy trade, reflecting the continent’s push for greater energy independence and stronger regional trade relations.
Several factors will determine the success of this Ghana-Dangote refinery partnership. These include political and economic stability, effective fuel supply management, and the ability of local infrastructure to handle the refinery’s output. A successful collaboration could encourage other African nations to invest in regional energy solutions, creating a more interconnected and resilient energy market.
The Dangote refinery is a strategic project for Nigeria and its partners, including Ghana. Its full effect on the African energy market will become clear once it operates at total capacity. This collaboration may also pave the way for further regional partnerships in critical sectors, driving economic growth and strengthening Africa’s position in the global economy.
This partnership highlights how regional cooperation could lead Africa toward a more sustainable, self-sufficient energy future. It may spark broader efforts toward economic integration across the continent.