Dangote is considering another mega refinery — this time in Kenya
The proposed Kenya refinery could reshape Africa’s fuel market as energy costs remain high across the continent.
As fuel prices remain high across Nigeria and pressure continues to mount on households and businesses, Aliko Dangote’s latest refinery plans are reopening conversations about Africa’s dependence on imported petroleum products and whether large-scale refining projects can genuinely improve energy stability on the continent.
The Nigerian billionaire said he is considering Kenya as the preferred location for a proposed 650,000 barrels-per-day refinery estimated to cost between US$15bn and US$17bn, according to an interview with the Financial Times.
If completed, the refinery would rank among the largest in Africa and could significantly reshape fuel supply in East Africa, where most countries still rely heavily on imported refined petroleum products.
Dangote said he favours the Kenyan coastal city of Mombasa over Tanzania because of its deeper port infrastructure and larger consumer market. The refinery would reportedly process crude from Uganda and international suppliers.
The proposal comes less than two years after the operational rollout of the Dangote Refinery in Lagos, which has already altered fuel supply conversations within Nigeria and across parts of West Africa.
But while the expansion signals growing investor confidence in African refining, analysts say the bigger issue is whether new refineries can meaningfully shield African economies from rising fuel costs and global supply shocks.
Africa still imports most of its fuel
Despite being rich in crude oil and gas resources, Africa remains heavily dependent on imported refined petroleum products.
According to the African Development Bank, the continent imports around 120 million tonnes of refined petroleum products annually because refining capacity remains limited in many countries. That dependence has repeatedly exposed African economies to global crises, currency fluctuations and disruptions in international shipping routes.
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Recent tensions involving the Middle East and concerns around the Strait of Hormuz once again highlighted how vulnerable many African countries remain to external fuel supply disruptions.
East African countries are particularly exposed because most refined products used in the region are imported from the Middle East and Asia. Energy economist Kelvin Emmanuel said the push for more local refining across Africa is largely driven by energy security concerns rather than just industrial expansion.
“The challenge for most African countries is that they export crude oil but import refined products at higher costs,” he said. “That leaves economies vulnerable whenever there are disruptions globally.”
Will Nigeria benefit from another Dangote refinery outside the country?
The announcement has also triggered questions inside Nigeria, especially at a time when petrol prices remain elevated despite the start of local refining operations in Lagos.
Nigeria removed its long-standing fuel subsidy in 2023, leading to multiple petrol price increases. In many parts of the country, petrol prices have since remained above ₦900 per litre depending on transportation costs and market conditions.
While the Dangote Refinery has increased local supply of petrol, diesel and aviation fuel, the expected sharp drop in pump prices has not fully materialised for many Nigerians.
Experts say refining alone does not automatically translate into cheap fuel. Exchange rate instability, crude oil prices, logistics costs, taxes and market liberalisation policies still influence final petrol prices.
Economist and Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, said the real long-term benefit of local refining lies more in supply stability and reduced import dependence than immediate cheap fuel.
“What refining capacity does is improve energy security and reduce exposure to import-related shocks,” he said. “But pricing is still influenced by broader economic realities.”
Analysts also note that a successful refinery network across different African regions could strengthen intra-African petroleum trade under the African Continental Free Trade Area framework.
Still, concerns remain around policy consistency, infrastructure and government support, issues that have historically affected large industrial projects across the continent.
Dangote himself acknowledged that government backing would play a major role in whether the Kenya project moves forward.
“There is no refinery in the world that can survive without protection,” he said, warning that cheaper imported fuel from markets like Russia and India could affect refinery profitability if governments fail to introduce supportive policies.
