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Nigeria’s giant Dangote refinery is benefiting from record margins on jet fuel, but the gains are being felt far more abroad than at home. While the refinery is shipping most of its output to Europe, domestic airlines are warning that the surge in jet fuel prices could force them to halt flights.
The refinery, the largest in Africa, was built to turn Nigeria from a fuel importer into a net exporter of refined products and to shield the economy from global energy shocks. It became fully operational this year and is running at maximum capacity of 650,000 barrels per day, improving local fuel availability even as domestic prices remain among the highest on the continent.
The tension comes from Nigeria’s deregulated market and the way Dangote must source most of its crude. Because the state oil company’s repayment arrangements make imported crude easier to balance on the books, the refinery can earn better returns by selling jet fuel abroad rather than focusing on the local market.
For airlines, the situation is far worse. Industry operators say jet fuel prices have climbed to 3,300 naira per litre once logistics and storage are included, nearly triple February’s level before the Iran war began, while the regulator says Dangote’s gantry price is lower but still too high for carriers already under pressure.
The government has stepped in with talks, debt relief and pressure to lower prices after airlines threatened to suspend operations. The episode highlights a familiar pattern in African energy markets: a big domestic refinery can improve supply, but without price stability and market coordination, transport users may still bear the pain.
