
Insist refinery can reduce Nigeria’s $1.82b plastic imports
The African Refiners and Distributors Association (ARDA) has reiterated the need for the harmonisation of regulations and pricing across African nations to address infrastructure challenges that threaten energy security on the continent.
Executive Secretary of ARDA, Anibor Kragha, speaking during a webinar, emphasised that Nigeria’s energy challenges mirror those of other African nations and can be mitigated through coordinated efforts.
Kragha said regional regulatory harmonisation, market-based pricing of fuel products, and addressing of infrastructure bottlenecks are critical to minimise supply chain risks.
Coming amidst rising prices of petroleum products in Nigeria, Kragha said other African countries are facing the hard decision of increasing prices of fuel.
Kragha noted that the absence of unified fuel specifications across African countries limits economies of scale and fosters fuel smuggling due to varying pricing policies.
A harmonised approach, he argued, could allow landlocked nations to coordinate supply volumes and ensure better security of fuel delivery. Efforts are already underway, led by the African Union (AU) and ARDA, to implement fuel standards. East African Community (EAC) countries have taken steps toward this goal, and West Africa’s ECOWAS region is working on implementing the Clean Fuels Directive.
Kragha criticised the continued regulation of fuel prices in many sub-Saharan African countries, where fixed margins stifle competition and encourage inefficiency.
He stressed the importance of moving towards market-based pricing to stimulate competition, which could ultimately lower costs for consumers. He recommended regular reviews of price structures to align with international market realities, urging governments to consider full market liberalisation.
Infrastructure bottlenecks across Africa were identified as a major factor in the continent’s supply chain issues. The ARDA Executive Secretary pointed to the inadequacy of existing infrastructure such as rail networks, pipelines, and port capacities against growing demand projections.
He highlighted the inefficiencies caused by relying on trucks to transport fuel, particularly in rapidly urbanising areas, leading to increased pollution, traffic accidents, and productivity losses.
Kragha urged African governments to secure timely investments in infrastructure to meet the continent’s growing energy demands. In Nigeria, for instance, the country’s expanding refining capacity, including the newly commissioned Dangote Refinery, offers opportunities for more efficient supply chains and improved energy security, Kragha noted.
He said Nigeria is positioned to take advantage of its expanding refining sector, with both public and private refineries like Waltersmith, Aradel, and OPAC complementing the Nigerian National Petroleum Corporation Limited (NNPCL) assets. The ongoing rehabilitation of the Port Harcourt and Warri refineries, according to him, is expected to boost domestic refining capacity, depending on crude availability.
Kragha also emphasised the potential for Nigeria to become a regional petrochemicals hub, given its vast natural gas resources and growing population. With the likes of Indorama and Dangote Petrochemicals leading the way, Kragha noted that Nigeria could reduce its reliance on imported plastics and petrochemical products.
He noted that while Nigeria exports significant quantities of raw feedstocks like methane and propane due to limited domestic upgrading capacity, ending flaring and investing in local petrochemical facilities could reduce harmful emissions and create economic opportunities. In 2023, Nigeria imported $1.82 billion worth of plastics, which Kragha said could be curtailed by domestic production.
Looking ahead, Kragha highlighted the pressing need for African countries to address energy security as the continent’s population and demand for energy grow rapidly.
By 2050, Nigeria’s population is expected to reach nearly 400 million, making it the third most populous nation in the world. Ensuring reliable, affordable, and sustainable energy for this growing population will be a major challenge.
A recent white paper by Puma and CITAC analysed Africa’s port infrastructure and called for an urgent need for upgrades because many African ports face shallow drafts, congested berths, and small storage tanks.
These developments contribute to supply chain disruptions, higher costs, and pollution. Addressing these infrastructure issues, Kragha said it would be essential to securing Africa’s energy future.
With Africa’s energy needs set to rise significantly in the coming decades, ARDA’s call for harmonised regulations, market-based pricing, and infrastructure improvements offers a roadmap for ensuring energy security across the continent while investing in infrastructure and fostering competition to mitigate supply chain risks and meet the growing energy demand sustainably and cost-effectively.