GHANA could soon be importing petroleum products from Nigeria’s Dangote Oil Refinery, a move that may drastically cut reliance on pricier European imports. Once the Nigerian refinery reaches its full operational capacity, Ghana’s National Petroleum Authority (NPA) anticipates shifting its monthly fuel imports, worth around $400 million from Europe, to the Nigerian refinery.
Speaking at the OTL Africa Downstream oil conference in Lagos, NPA Chairman Mustapha Abdul-Hamid highlighted the potential impact of the refinery’s capacity on Ghana’s fuel market. ‘If the refinery reaches 650,000 barrels per day, that volume can’t be consumed by Nigeria alone. It would be far easier for Ghana to import from Nigeria rather than Europe, and I believe this shift could bring down our fuel prices,’ said Abdul-Hamid.
Cost-saving potential and regional benefits
The Dangote Oil Refinery, developed by Nigerian billionaire Aliko Dangote, is projected to be nearly fully operational by the end of the year, with analysts expecting full capacity by early 2025. Once online, the facility will significantly increase Nigeria’s fuel production capacity, offering surplus to nearby nations, including Ghana.
For Ghana, sourcing fuel from Nigeria could yield substantial savings, not only on fuel costs but also on other goods and services impacted by freight expenses. Abdul-Hamid noted that importing from Nigeria would eliminate high transportation costs currently factored into European imports. ‘The reduction in freight expenses would help bring down the prices of various goods, positively impacting Ghana’s broader economy,’ he added.
Towards regional economic integration
Looking further ahead, Abdul-Hamid expressed optimism about deeper regional cooperation, including the establishment of a common currency to reduce reliance on the US dollar for trade within Africa. Such a currency could streamline transactions across the continent, helping stabilise fuel prices and reducing the need for costly foreign exchange.
Ghana’s economy, which saw a 6.9 percent year-on-year growth in the second quarter of 2024, has been bolstered by the extractive sector, significantly increasing fuel demand. By tapping into Nigeria’s expanding refining capacity, Ghana could not only reduce costs but also enhance energy security.
As the Dangote Refinery ramps up production, Ghana’s decision to buy closer to home marks a step towards regional economic integration. This shift could reshape Ghana’s import strategy, offering a more stable, cost-effective fuel supply that supports both the nation’s economy and its efforts to reduce dependency on non-African trade partners.
