Key takeaways
- South Africa has overtaken Nigeria as Africa’s largest importer of refined petroleum products, driven by idled local refining capacity and surging demand.
- Nigeria’s fuel imports have declined due to the startup of the Dangote Refinery and the removal of gasoline subsidies, but its refining capacity utilization can still improve.
- Egypt quietly leads in refinery efficiency, maintaining the highest utilization rate among Africa’s top three economies despite rising import dependence.
- Across Nigeria, South Africa, and Egypt, refined fuel imports have grown fivefold since 2005, costing the trio $43.5 billion in 2023 alone.
- Better refinery utilization could reduce Africa’s fuel imports by 23%, potentially saving the continent $10 billion annually and improving energy security.
South Africa’s fuel crown – what is behind the headlines?
South Africa overtaking Nigeria as the continent’s largest refined petroleum products importer made headlines recently. This news is a sign of significant shifts occurring in Africa’s downstream energy sector.
The ramping up of Nigeria’s 650,000-barrels-per-day (BPD) Dangote Refinery – already disrupting Atlantic energy trade flows, as I have documented – has featured prominently in the story of South Africa’s economic ascent. The refinery’s role has been to reduce Nigeria’s import of refined product. In so doing, it has helped boost South Africa’s petroleum imports to levels exceeding Nigeria’s.
A second factor in this shift has been the removal of gasoline subsidies in May of 2022. This policy action raised gasoline prices, driving down demand for gasoline, which constitutes 70%+ of Nigeria’s refined product demand. According to the Nigerian National Bureau of Statistics, Nigeria’s total gasoline truck-out volume (a proxy for demand) decreased by 17% from 24.35 billion litres (419 Mbpd) in 2022 to 20.22 billion litres in 2023.
CITAC – the energy consultancy that pointed out this turn of events with South Africa’s imports – revealed that in the first quarter of 2025, Nigeria imported 3.1 million metric tonnes (245 Mbpd) of refined petroleum products compared to South Africa’s import of 4.2 million tonnes (330 Mbpd). Further, CITAC projects that in 2025, Nigeria’s total refined fuel imports will decline to 6.4 million tonnes (130 Mbpd), less than half of South Africa’s projected 15.5 million tonnes (306 Mbpd) for 2025.
While this development has been hailed as a significant milestone for Nigeria – which in 2023 spent $18.2 billion on refined products imports – there is more to be unpacked in the energy dynamics of the continent. South Africa’s emergence as the leading refined products importer is against the backdrop of a cocktail of increasing energy demand, idled refining capacity, and policy changes in Nigeria.
To unravel the dynamics at play, I will stack together Nigeria, South Africa, and Egypt. These three countries have a combined GDP in purchasing power parity (PPP) equivalent of $4.05 trillion (measured in constant 2021 terms), which represents 40% of the continent’s GDP. Further, one-quarter of the continent’s population lives in one of these three countries. Focusing on petroleum product imports, the three nations accounted for 42% of the $104 billion in petroleum product imported into Africa in 2023.
How oil moves – crude supply, refining, and policy interplay
How crude oil and refined petroleum product flow into and out of a country can be represented as a network or “reference energy system” as depicted in Figure 1. This representation is valuable in describing the interaction between a country’s system of crude oil supply, refining, and downstream supply of petroleum products.
Figure 1 – How crude oil flows from supply, conversion and refined product distribution.
According to Figure 1, oil supply can originate from domestic crude oil production or be imported into the country. Domestic crude oil production may be sent to export markets, and a part of it to the refining system. Crude oil for the refining system can either be refined in local refineries or sent for offshore refining under specific contractual arrangements. These contracts are either offshore processing arrangements (a tolling arrangement) or swap programs driven by the relative valuation of crude oil and the derivative petroleum products. Either way, these arrangements require that the refined petroleum products be supplied back into the country.
Oil-producing countries with deficient or insufficient domestic refining capacity have been known to send volumes for offshore process arrangements or in swap programs in exchange for petroleum products. This has been documented for countries including Angola, Iran, Indonesia, Malaysia, China, Saudi Arabia, Nigeria, and Kuwait who have used swaps in the past to meet domestic need for refined products.
The domestic refineries produce refined products that can go to the domestic market as well as to the export market. Still, a country may directly import refined products. Ultimately, a country’s petroleum product demand is satisfied by a combination of: (i) supplies from domestic refining, (ii) supplies from offshore refineries (as swap or offshore processing), and (iii) direct and independent petroleum product imports. The choice of how refined products are supplied comes down to the combination of the level of domestic crude production, quality of crude oil, refining capacity and complexity, and domestic demand (aggregate and product specific).
The changing guard – Nigeria vs South Africa
Nigeria is a major crude producer but also a major importer of refined products due to the historic inability of its refineries to meet domestic demand. However, the on-streaming of the Dangote Refinery promises to alter energy trade within the country and internationally. With a capacity that is 42% of Nigeria’s total oil production in 2023, this could affect Nigeria’s status as an oil-exporting country.
The refinery increased Nigeria’s nameplate oil refining capacity by 134% – from 486 Mbpd to 1.13 MMbpd as seen in Table 1. Including Dangote’s 30-Mbpd gas-to-liquids plant increases total refining capacity to 1.16 MMbpd.
Table 1 – Nigeria’s refining assets.
However, Nigeria’s refining system has suffered from low capacity utilization that averaged 30% over 40+ years from 1980 as Figure 2 reveals (note the large area representing unutilized capacity). Additionally, Nigeria’s oil production has declined (by 40% since its peak in 2005) even as an increasing share of it has been exported – at least 85% since 1995. Surging product demand, historically propelled by a growing economy, increasing population, urbanization, and subsidized gasoline has been met predominantly by imports that have grown more than 10-fold since 1980.
Figure 2 – Nigeria’s refining utilization and oil export picture.
Before the Dangote refinery came onstream in 2023, the most aggressive refining capacity ramp-up occurred between 1979 and 1989. In that decade, Nigeria’s refining capacity increased by 178% from 160 Mbpd (1979) to 445 Mbpd (1989), even as crude oil exports as percentage of production increased from 76% to 89%.
Although the status of Nigeria as an importer of refined product grabs attention, the country has also recorded refined products exports. Exports of refined product – mainly liquefied petroleum gas and diesel, or gasoil – make up a relatively small proportion of its consumption. From 2019 to 2022, the country exported an average of 66 Mbpd of refined products (Figure 3). In 2022, exports amounted to 56 Mbpd, valued at $1.17 billion, mostly to Europe ($0.71B) and the United States (0.25B).
Figure 3 – Nigeria’s exports of refined oil products (Source: US EIA).
The 30 Mbpd gas-to-liquids plant, though not captured in Figure 2, contributes to the products export picture shown in Figure 3.
Although South Africa has a nameplate refining capacity of 703 Mbpd, around half of it is non-operational as detailed in Table 2. South Africa has a coal-to-liquids plant with a nameplate capacity of 150 Mbpd, as well as an idled 45 Mbpd gas-to-liquid facility.
Table 2 – South Africa’s refining assets.
Historically, South Africa’s oil refining sector, the capacity of which plateaued at 520 Mbpd between 2005 and 2020 (discounting both the GTL and CTL facilities), averaged a capacity utilization of 75% as seen in Figure 4. South Africa is not considered a “major” crude oil producing country – its crude oil production peaked at 35 Mbpd in 2004, up from 13 Mbpd in 1997. Subsequently, its oil production has declined to 0.55 Mbpd (2023). Therefore, the country has relied on crude oil imports to help meet its burgeoning refined products demand. As a result, the dark line in Figure 4 represents the proportion of oil imports that make up the refineries’ throughput.
Figure 4 – South Africa’s refining utilization and oil import picture.
Crude oil imported to South Africa in 2023 amounted to 170 Mbpd (valued at $4.67 billion), down from 445 Mbpd in 2019. Imports in 2023 mostly came from Nigeria ($2.3B), Saudi Arabia ($1.04B), and the United States ($0.42B).
On the demand side, South Africa consumed 609 Mbpd (2023) in refined products, of which 52% was met by imports. In that same year, Nigeria’s demand was ~ 530 Mbpd, of which 97% was imported. While Nigeria’s refined product consumption since 2005 has been about 60% of South-Africa’s, Nigeria’s imported volumes are about twice that of South Africa’s. This further deepens the significance of the recent reversal in import status.
South Africa’s refined product import bill has increased – in 2020, the country imported $3.58 billion worth of refined products, which increased to $15.4 billion in 2023. This import value is about 15% of South Africa’s total import bill in 2023. Further, 90% of this value was due to import from Asia, led by the UAE ($3.32B), India ($2.63B), and Oman ($2.45B). Oil prices roughly doubling from an average $42/bbl in 2020 to $83/bbl in 2023 partly explains the increase, but demand and, by extension, import levels also drove the fourfold increase in the import bill. Consequently, foreign exchange reserves are strained, and the energy supply risk of a very important African country is concentrated in a specific region.
The broader African context: introducing Egypt
Egypt’s refineries have a combined processing capacity of 763 Mbpd (2023), with several of the plants slated for expansion (see Table 3).
Table 3 – Egypt’s refining assets.
From 2001 to 2018, Egypt’s refining capacity plateaued at 733 Mbpd. However, from 1980, the throughput on the refineries has ranged from 300 Mbpd to 650 Mbpd, implying a utilization rate of 80% from 1980 to 2023 (Figure 5). Even with this impressive refinery utilization (compared to Nigeria’s 30% and South Africa’s 75%), Egypt still imported an estimated 300 Mbpd out of the 830 Mbpd of refined product it consumed in 2023.
Figure 5 – Egypt’s refining utilization and oil export picture.
Like Nigeria, Egypt is an oil and gas producer. However, while Nigeria’s oil export ratio has been in an upward trajectory (Figure 2), Egypt’s oil exports ratio has declined – from 24% in 2016 to 12% in 2023 as noted in Figure 5. More remarkable is Egypt’s export ratio dropping from 60% in 1980 to 5% in 2004. This decline coincided with the country’s increase in refining capacity and utilization.
To meet the burgeoning petroleum product demand that grew at a CAGR of 1.39% per annum from 2005 to 2023, Egypt has had to import crude oil to be refined, while also importing refined products. In 2023, Egypt imported 60 Mbpd of crude oil worth $1.92 billion, all from the Middle East – Kuwait ($1.04B), Saudi Arabia ($0.69B), and Iraq ($0.2B). In the same year, the country imported $8.52 billion worth of refined products while exporting crude oil valued at $2.37 billion and refined products worth $4.34 billion.
The big three – a continental energy power check
Across Egypt, Nigeria, and South Africa, refinery capacity has grown from 1.7 MMbpd (2013) to 2.31 MMbpd (2023). Since 1980, 50% of the continent’s refining capacity has been concentrated in these three counties. Recent developments in Nigeria have driven up that number to 56% for the big three.
However, the utilization of the capacity tells a more nuanced story. That is the focus of Figure 6, which captures the utilization rate of the three countries. Granted that Nigeria exhibits a dramatic decline in utilization, South Africa and Egypt are not exempt.
Figure 6 – Refining utilization of Egypt, Nigeria, and South Africa.
Egypt’s utilization has slowly declined from 89% (2007) to 59% (2023), while South Africa’s has dropped from a high of 91% (2016) to 72% (2023). It is worth remembering that half of South Africa’s capacity has been idled – hence the capacity against which throughput is computed is significantly less than the 520 Mbpd of its existing oil refineries.
Also note the erratic changes in utilization rates across all three countries, symptomatic of supply-chain challenges, difficulties with refinery operations planning, and outages.
Confronted with the increasing demand for refined products and inability of domestic supply to keep up, refined product imports must increase. Across all three countries, the quantity of refined products imported grew at 8.23% per annum from 2005 to 2023, compared to 1.65% per annum growth in products consumed. The implication was that import dependence among these countries climbed as analyzed in Table 4.
Table 4 – Consumption and imports in Egypt, Nigeria, and South Africa.
Of the three countries, Nigeria’s consumption, although the least, has exhibited the fastest growth at 3% per annum from 2005 to 2023. This compares to Egypt’s 1.4% per annum and South Africa’s 1% per annum. Interestingly, on a per-capita basis, in 2023, Nigeria’s consumption is at 0.84 bbls/person/year compared to South Africa’s 3.52 bbls/person/year, and Egypt’s 2.65 bbls/person/year.
From 2005 to 2023, Egypt’s import dependence went from 8% to 36%, Nigeria’s went from 42% to 97%, and South Africa’s from 17% to 52%. This is related to the capacity utilization trend we spotlighted previously. This connection is seen clearly in Figure 7.
The correlation plot between capacity utilization and import dependence reveals a clear negative relationship, where capacity utilization indicates the ability to supply products from domestic refining.
Figure 7 – Product import dependence is negatively related to refinery capacity utilization.
Based on 40+ years of data for Egypt, Nigeria, and South Africa, we can say that if refinery capacity utilization were to increase by 10%, import dependence would fall by 13%. At the demand of 2 MMbpd (2023), this would imply reduction of imports by 260 Mbpd (a 23% reduction) across the three countries. We will come to the financial impact shortly.
These surging imports have meant that across Africa, $103.53 billion was spent on refined product imports in 2023, up from $16.59 billion in 2006 as we see in Figure 8. Additionally, these three countries have been responsible for an increasing share of the imports – from 27% in 2006 to 42% in 2023.
Figure 8 – Cost and shares of refined petroleum product imports.
Armed now with the knowledge that the “big three” spent $43.48 billion to import 1.125 MMbpd of petroleum product in 2023, a 23% reduction in this import quantity would have kept $10 billion on the continent. For context, that is about half of Nigeria’s 2023 petroleum import bill.
Challenges and opportunities for African refining
As demonstrated above, the refining system on the continent has been unable to keep up with burgeoning demand of refined petroleum products. This has contributed to the increasing import of refined products. Globally, the continent has the least refining capacity per capita at 1 bbl/person/year, a utilization rate of 45% (2023), and witnessed the slowest growth in refining capacity. Asia-Pacific’s growth rate of 4% per annum between 1965 and 2023 has far outpaced Africa’s 2% annual growth over the same period.
Additionally, refineries on the continent have struggled to fund upgrade programs, which has translated to difficulty for the refineries maintaining uptime, and meeting increasingly stringent fuel standards. When coupled with the reality that 80%+ of the capacity on the continent is owned by governments through their NOC, the context of scarce financing becomes stark. Historically too, subsidies on petroleum products have strained government resources, increased products demand, while acting as an added disincentive for private sector investment in refining.
The presence of crude oil reserves is no assurance of feedstock supply. Declining production from Nigeria and Egypt, premium-priced crude oil, and pledged volumes have meant that the newly commissioned Dangote refinery, for example, must import a portion of its feedstock requirement. Egypt’s declining production also exposes the country’s refining system to feedstock imports. Like Nigeria, Egypt’s crude oil production and refinery capacity utilization have been in decline even as refined products demand has trended upward.
Figure 9 – Trend of oil production indexed to year 2000.
However, there are opportunities for those with capital and appetite for risk. Refined products consumption per capita in Africa is the world’s lowest – at 1 barrel/person/year, this is one-third that of the Asia-Pacific’s 3.5 bbls/person/year. This suggests significant headroom for growth. Figure 10 illustrates the yawning gap between Africa’s per-capita consumption and its per-capita domestic supply.
Figure 10 – Refinery production versus oil consumption.
The Dangote refinery at full capacity utilization stands positioned to fill some of that gap. But more needs to be done – such as reversing the downward trend of oil production, and expanding the continent’s refining footprint. If the Dangote refinery were the only operational refinery in Nigeria and it ran at full capacity, it would imply a national 47% capacity utilization. This would be higher than the historic 30% average. However, that would concentrate supply risk, create market distortions, reconfigure the domestic political chess board, and still not obviate the need for future imports as demand grows.
Conclusion – the uneasy crown of fuel import superiority
South Africa’s record for the highest petroleum product importer in the land is a story of the shifting dynamics of crude supply, refining asset performance, increasing product demand, and policy interventions. I have narrated six decades of history leading to this point.
While Nigeria’s situation is improving with new capacity, hurdles remain. Declining production, increasing demand, and delayed capacity expansion may well result in increased imports of both crude oil and refined products. Meanwhile, South Africa’s challenges highlight the broader need for strategic investment in Africa’s refining sector. The story of African fuel imports is dynamic, complex, and intertwined with the economic development and energy security of the continent.
So, even as we crown South Africa “King of Imports,” let us remember that it is a weighty, unenviable crown that can pass quickly to other nations.
(Kaase Gbakon, BIG Media Ltd., 2025)
