Nigeria Emerges as Africa’s Leading Oil Trading Hub

• Nigeria Emerges as Africa’s Leading Oil Trading Hub
• Africa downstream market is projected to grow from $80.5 billion in 2024 to $120.8 billion by 2032
• Nigerian gasoline markets are increasingly aligning with international benchmarks

Africa is rapidly positioning itself as the next major growth frontier for the downstream oil and gas sector, with Nigeria evolving from a price-taker to a dynamic regional trading hub for refined petroleum products, industry leaders have said at the ongoing Oil Trading and Logistics (OTL) Africa Downstream Week 2025 in Lagos.

Dr Riverson Oppong, CEO of the Chamber of Oil Marketing Companies (Ghana) and Africa Regional Director, said the continent’s downstream market is projected to grow from $80.5 billion in 2024 to $120.8 billion by 2032.

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He described Africa as a strong market compared with traditional regions such as Europe and North America, where demand is expected to decline by 2035.

Citing a McKinsey report, Oppong said Africa’s demand for petroleum products is projected to increase by 2.2 million barrels per day between 2019 and 2035, representing a Compound Annual Growth Rate of 2.3 percent, positioning the region alongside South and South-East Asia as one of the fastest-growing downstream markets globally.

He urged operators to embrace digitisation and innovation, describing them as critical for competitiveness and value creation. Digital transformation, he said, could yield 12–20 percent reductions in operating costs, 6–12 percent increases in throughput, 15–25 percent fewer unplanned shutdowns, and 8–12 percent higher plant efficiency. Technologies such as Advanced Process Control (APC), digital twins, and predictive maintenance were highlighted as essential tools for improving efficiency and reliability in refineries and depots.

Oppong also stressed the importance of joint ventures and strategic alliances, particularly for smaller operators seeking to expand market access, manage capital intensity, and share risks.

In a related presentation, James Gooder, Vice-President of Argus Media, said that Nigeria’s gasoline market is evolving into a regional trading hub, following the liberalisation of the sector. He described the market changes as a historic opportunity to foster competition and align fuel pricing with international standards.

Gooder noted that efficient trading requires a shared understanding of quality, delivery terms, and pricing. Nigerian gasoline markets, he said, are increasingly aligning with international benchmarks, allowing regional pricing to be based on negotiated premiums to the Argus EBOB benchmark, enhancing competition and benefiting both importers and consumers.

He highlighted that the Dangote Refinery ramp-up and the increased participation of local companies in gasoline importation have strengthened competition, improving efficiency and reducing reliance on international price gaps.