Dangote Industries Limited has commenced preliminary works on its proposed $17bn, 700,000-barrels-per-day refinery in Kenya, marking the first major step towards what is expected to become East Africa’s largest refining project.

The company said the project has advanced beyond the planning stage, with the site already selected, soil tests ongoing and engineering and design work underway ahead of construction.

According to Reuters, the refinery, which will be located on Lamu Island off the Kenyan coast, is expected to take about three years to complete and will supply refined petroleum products to Kenya and neighbouring countries, reducing East Africa’s dependence on imported fuels.

The development comes as Bloomberg reported on Tuesday that President of the Dangote Group, Aliko Dangote, plans to build the refinery at an estimated cost of up to $17bn as part of efforts to expand his refining empire into East Africa.

Citing a spokesman for Dangote Industries Ltd., Bloomberg reported that the proposed refinery would replicate the company’s refinery in Lagos and process about 700,000 barrels of crude oil per day when completed.

The report read, “A new mega-refinery to be built at the Kenyan coast by Africa’s richest person will cost as much as $17bn, a spokesman for Dangote Industries Ltd. has confirmed.

“Billionaire Aliko Dangote personally pledged to the leaders of Kenya and Uganda that he would set up a replica of his 700,000-barrel-a-day refinery outside Lagos in East Africa. The refinery would take about five years to build.”

According to the report, Dangote personally assured the Presidents of Kenya and Uganda that he would establish the refinery in East Africa. The report recalled that Kenyan President William Ruto announced in May that Dangote would commence construction of the refinery this year.

Speaking to Reuters, Dangote Industries’ Vice President for Oil and Gas, Devakumar Edwin, said the company had made significant progress on the project. “The site has been selected, soil tests are underway, and design and engineering work has commenced. Kenya was the choice from the beginning,” he told Reuters.

According to Bloomberg, Dangote said the coastal town of Lamu in southeastern Kenya was selected as the preferred location “for commercial and technical reasons,” although he did not provide further details.

The report added that Tanzania had initially been considered as a possible location for the refinery before Kenya emerged as the preferred destination.

The project represents Dangote Group’s biggest refining investment outside Nigeria and forms part of the company’s ambition to expand refining capacity across Africa following the commencement of operations at its 650,000-barrels-per-day refinery in Lagos.

Devakumar disclosed that the refinery would be financed through a combination of internally generated cash, bonds, and proceeds from the company’s planned initial public offering.

He, however, declined to state the exact cost of the project, saying it would be comparable to that of the Lagos refinery. The Lagos refinery, built by Aliko Dangote, eventually cost more than $20bn before commencing operations in 2024.

Reuters reported that the project was initially estimated at about $9bn in 2013, but costs escalated following the relocation of the site, engineering challenges, currency weakness, the COVID-19 pandemic and global inflation.

The investment comes as Dangote is simultaneously pursuing another ambitious expansion programme in Nigeria, where the capacity of the Lagos refinery is being doubled from 700,000 barrels per day to 1.4 million barrels per day by 2028. Once completed, the Nigerian complex is expected to become one of the world’s largest refining facilities.

Dangote Industries Limited has also unveiled plans to increase its combined refining capacity to 2.1 million barrels per day across Nigeria and Kenya as part of its long-term strategy to expand its footprint across Africa.

Edwin disclosed this during a recent visit by a delegation from the Republic of the Congo’s national oil company, Société Nationale des Pétroles du Congo, to the Dangote Petroleum Refinery in Lagos.

He said the expansion would raise the group’s total refining capacity to 2.1 million barrels per day, comprising 1.4 million barrels per day in Nigeria and the planned 700,000-barrels-per-day refining complex in Kenya to serve East African markets.

He also disclosed plans by the group to invest an additional $46bn between 2026 and 2028 across its refining, cement and fertiliser businesses as part of its drive to accelerate industrialisation across Africa.

The proposed Kenyan refinery reflects a growing recognition across Africa that local refining has become increasingly critical to energy security, foreign exchange conservation, and industrial development.

For decades, despite producing millions of barrels of crude oil daily, Africa has remained heavily dependent on imported refined petroleum products because of inadequate refining capacity.

Data show that while Africa contributes about seven per cent of global crude oil production, refining capacity across the continent declined by roughly one-third over the past two decades as ageing refineries suffered years of underinvestment, operational inefficiencies and poor maintenance.

The commissioning of the Dangote refinery has begun to reverse that trend. The refinery reached full operational capacity shortly before the recent Middle East tensions involving Iran, helping Nigeria significantly reduce its dependence on imported petrol and other refined products while improving domestic fuel availability.

Its success has renewed interest among African governments and private investors seeking to replicate the model in other parts of the continent. Beyond Kenya, several countries are now pursuing similar projects to strengthen their domestic refining industries.

In Mozambique, Nigerian businessman Benedict Peters has indicated interest in developing a proposed 200,000-barrel-per-day refinery, while Uganda is advancing plans to construct a 60,000-barrel-per-day refinery to meet domestic demand and supply neighbouring markets in Kenya and Tanzania.

According to the African Petroleum Producers’ Organisation, Africa currently exports about three-quarters of the crude oil it produces while importing approximately 70 per cent of the refined petroleum products consumed across the continent.

This imbalance has continued to expose African economies to volatile international fuel prices, high transportation costs, and foreign exchange pressures.

The proposed Kenyan refinery is therefore expected not only to strengthen East Africa’s energy security but also to deepen regional trade in refined petroleum products, reduce import dependence and stimulate industrialisation across the region.

Africa possesses abundant crude oil reserves but has historically lacked sufficient refining infrastructure to process its production locally. As a result, many oil-producing countries export crude oil and import expensive refined petroleum products, exposing their economies to global supply disruptions and price volatility.

The commissioning of the 650,000-barrel-per-day Dangote Petroleum Refinery in Nigeria marked a major shift in the continent’s refining landscape, boosting local fuel production and encouraging governments across Africa to prioritise investments in domestic refining capacity.

The proposed Kenyan refinery represents one of the continent’s most ambitious downstream projects and could significantly reshape fuel supply dynamics in East Africa while advancing the African Union’s broader agenda of industrialisation and regional energy integration.

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Independent petroleum marketers on Monday pushed for the restoration of importation rights and projected that the pump price of Premium Motor Spirit, popularly called petrol, could fall below N800 per litre as the Federal Government intensified efforts to force down the cost of petrol.

The development came as the Federal Government met with major operators in the downstream petroleum sector, including representatives of the Dangote Petroleum Refinery, over what it described as the disconnect between falling global crude oil prices and the relatively high pump prices of petrol in the domestic market.

The stakeholders’ meeting on cost-reflective pricing of PMS, held at the headquarters of the Nigerian Midstream and Downstream Petroleum Regulatory Authority in Abuja, brought together the Federal Competition and Consumer Protection Commission, the Independent Petroleum Marketers Association of Nigeria, the Major Energy Marketers Association of Nigeria, the Depot and Petroleum Products Retailers Association of Nigeria, the Depot and Petroleum Products Marketers Association of Nigeria, the Nigerian Association of Road Transport Owners, and other major operators in the sector.

Also in attendance were chief executives and representatives of TotalEnergies, Eterna Plc, Matrix Energy Group, officials of the NMDPRA, and delegates from the Dangote refinery.

The PUNCH reports that petrol prices have remained a major source of hardship for households and businesses in Nigeria, with pump prices surging following the spike in global crude oil prices triggered by tensions in the Middle East, particularly between Iran and the United States.

Although crude prices have moderated after diplomatic efforts eased the tensions, the reduction has yet to be fully reflected in domestic petrol prices, prompting the Federal Government to convene a stakeholders’ meeting aimed at driving a fair reduction in pump prices.

The National President of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, urged the government to permit independent marketers to import petroleum products directly, saying greater competition would ultimately reduce prices.

Maigandi also called for support for local refineries, particularly the Dangote Petroleum Refinery, while stressing the need to allow marketers to import products whenever necessary.

“Our major is that if products are to be distributed, let IPMAN buy products directly from the Dangote refinery and then, if we request importation, let IPMAN import by themselves. What we are trying to encourage is our local refinery. Let the government allow the local refinery to function properly and assist those who intend to refine products too,” he said.

The IPMAN president assured Nigerians that independent marketers were prepared to slash petrol prices significantly and projected that pump prices could fall below N800 per litre under the right market conditions.

“The price of the product is coming down bit by bit. Even when the price was increased, it was not increased at the same time. Likewise, now, as the price is coming down, we too are bringing the price down. If you check prices all over the country, you will see that independent petroleum marketers are reducing their prices gradually. Presently, we have reduced by N125 per litre nationwide,” he stated.

Miagandi added, “At any time when there is a reduction in price, we are ready to reduce the price to even below N800 per litre, not even N900. It depends on the way we buy the product from the private depot owners and the Dangote refinery.

“I thank God that the Dangote refinery has accepted independent petroleum marketers to start purchasing products directly. It is a plus, and very soon the populace will see the change in terms of price.”

The renewed push for importation comes amid an intense pricing battle in the downstream sector following the commencement of large-scale production at the Dangote refinery and the deregulation of the petrol market.

Speaking to journalists after a closed-door session with the stakeholders, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, said the government remained concerned that current petrol prices were not reflective of prevailing crude oil prices in the international market.

According to him, the government had engaged marketers in frank discussions aimed at ensuring that the reduction in global crude prices translates into lower pump prices for Nigerians.

Lokpobiri said, “The engagements are ongoing. We had very fruitful and frank discussions with the marketers and the leaders of the downstream sector of the petroleum industry with a view to driving down the price of PMS.

“My own opinion is that the petrol prices are not cost-reflective; they are not reflective of the cost of crude oil. But the marketers are also saying that crude oil prices are still high.

“In fact, somebody told us right there that the crude oil price for a month is still over $90 per barrel. But we are saying that when Brent crude was over $118 per barrel, the price was rapidly going up. Now that the price has come down drastically, why has petrol not come down correspondingly? That is a worry.”

The minister said the government had communicated the concerns of consumers to operators and directed them to return with practical measures that would lead to lower petrol prices.

“We have said that these are the issues of concern to the government. They have also said they will go back and think about what they can put together with a view to addressing the issue of the high cost of PMS that is not reflective of the price of crude in the market.

“We told them the concern of the Nigerian consumer, and they have also said they will go back and think of what concrete steps can be taken with a view to ensuring that the price drops,” he stated.

On when Nigerians should expect a reduction in petrol prices, Lokpobiri said discussions were still ongoing and declined to give a deadline. “As we called you today, we will call you as soon as possible. But the important thing is that discussions are ongoing,” he added.

Before the closed-door meeting, Lokpobiri warned petroleum marketers against using profits from previously acquired expensive fuel inventories as justification for maintaining high petrol prices, insisting that the benefits of lower replacement costs must be passed on to consumers.

The government said the continued disconnect between falling international crude oil prices and domestic petrol prices had become a source of concern, warning petroleum marketers against sustaining high pump prices of Premium Motor Spirit despite declining global crude prices and insisting that Nigerians should enjoy the benefits of lower replacement costs in a deregulated market.

He insisted that temporary gains realised from inventories purchased when crude oil prices were higher should not become the basis for sustaining elevated pump prices after global oil prices had declined.

“I am aware that PMS pricing is influenced by several factors beyond crude oil prices, but it is equally important to distinguish between genuine replacement cost and windfall gains arising from inventory management.

“Temporary gains realised from inventories acquired at higher prices should not become the basis for sustaining elevated pump prices after replacement costs have declined. As inventories are replenished at lower costs, the benefits of those lower costs should be transmitted to consumers in a timely and transparent manner. That is the essence of a competitive and efficiently functioning market,” he stated.

According to the minister, as marketers replenish their stocks at lower costs, reductions in procurement expenses should be reflected promptly in ex-depot and retail petrol prices in line with the principles of a competitive and efficient deregulated market.

The minister added that the Federal Government remained committed to protecting consumers in the post-subsidy era, stressing that deregulation was not designed to create opportunities for excessive pricing or market distortions but to deepen competition, improve efficiency, and deliver value to Nigerians.

He further warned that sustaining high energy costs beyond what prevailing market conditions justify could worsen inflationary pressures and undermine the gains recorded in moderating the country’s inflation rate.

The minister urged petroleum marketers and operators to immediately transmit the benefits of falling global crude oil prices to Nigerian consumers, warning that deregulation should not be exploited to sustain high petrol prices and generate windfall gains.

His comments come amid growing public concerns over the slow pace of reductions in petrol prices despite the sharp moderation in crude oil prices in recent months.

According to the minister, international crude prices traded between $61 and $65 per barrel in January before surging above $118 per barrel in April following heightened geopolitical tensions in the Middle East. However, prices have since declined to around $71 per barrel after the easing of the tensions.

He noted that while the earlier rise in crude prices exerted upward pressure on petrol prices, the subsequent decline had not been reflected proportionately in domestic pump prices.

“Ordinarily, such movements in crude oil prices should be reflected in the pricing of refined petroleum products. While the initial increase in crude prices understandably exerted upward pressure on PMS prices, the subsequent moderation in crude oil prices has not translated into a commensurate reduction in pump prices across the domestic market.

“This disconnect has understandably raised concerns. PMS peaked at about N1,596 per litre in May and currently sells at around N1,296 per litre. While there has been some reduction, the adjustment has not been commensurate with the decline in underlying market conditions,” the minister said.

He also called for the speedy operationalisation of the National Strategic Stock, describing it as a critical instrument for safeguarding national energy security and moderating future price shocks.

“The National Strategic Stock will strengthen national energy security, reduce exposure to supply disruptions, and moderate price volatility. There is urgency in ensuring that this mechanism becomes fully operational,” he said.

Nigeria’s petrol market has witnessed sharp fluctuations in prices over the past year, with pump prices peaking at over N1,500 per litre in some parts of the country following spikes in global crude oil prices and exchange rate volatility.

However, the recent decline in international oil prices and improved domestic refining capacity have increased pressure on marketers to cut prices, with many consumers expecting further reductions in the coming weeks.

The outcome of the government’s engagement with operators could determine the next phase of competition in the downstream sector and whether Nigerians will eventually see petrol prices fall to the N800 per litre level projected by marketers.

Earlier in his opening remarks, the Authority Chief Executive of the NMDPRA, Rabiu Umar, said the meeting was convened at the directive of the minister to address the growing concerns surrounding petrol pricing and ensure that Nigerians benefit from improvements in global market conditions.

Umar recalled that a similar engagement with operators in the domestic gas sector had recently resulted in a noticeable reduction in liquefied petroleum gas prices, expressing optimism that the same collaborative approach could deliver results in the petrol market.

“Just two weeks ago, many of us gathered in a similar forum to discuss the domestic gas sector. The candid dialogue and the actionable wins we secured during that session are already bearing fruit. Notably, we have seen LPG prices coming down significantly across the market, and we look forward to seeing even more reduction within the next two weeks.

“It is exactly this kind of tangible success that inspired today’s gathering. When regulators and industry operators sit at the same table, we do not just debate challenges; we engineer solutions,” he said.

The NMDPRA boss acknowledged that global crude prices had moderated significantly in recent weeks but lamented that the domestic retail market had yet to adjust accordingly.

“As a responsible regulatory authority, it is our duty to step in alongside you, our valued partners, to interrogate the market forces, understand the operational bottlenecks, and directly address this disconnect between falling replacement costs and sustained retail prices.

“Deregulation is not a licence for market distortion or unfair consumer pricing. It is intended to drive efficiency, maximise value, and protect the public interest. Sustainable profitability for marketers and consumer welfare are not mutually exclusive. We need to build a transparent ecosystem where the benefits of market improvements are passed down to the Nigerian consumer in a timely and fair manner,” Umar added.

He stressed that the objective of the meeting was not to dictate prices but to collaborate with industry stakeholders on practical solutions that would keep businesses viable while protecting consumers.

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United Bank for Africa Plc has announced that its Group Chairman, Tony Elumelu, will retire from the Board of Directors of UBA on August 21, 2026.

The decision follows the completion of the 12-year tenure limit prescribed for non-executive directors of banks by the Central Bank of Nigeria.

This was contained in a statement issued by the bank and sent to The PUNCH on Monday. The statement, signed by the Group Head of Marketing and Corporate Communications for United Bank for Africa Plc, Alero Ladipo, noted that the financial institution is entering a new phase of strategic growth.

“At its meeting held on July 6, 2026, the board accepted Mr Elumelu’s retirement and elected Mr Emmanuel Nnorom, a Non-Executive Director of the bank, as his successor, with effect from August 21, 2026,” the statement read in part.

The board appreciated Elumelu for his visionary leadership and exceptional contribution to the strategic vision and institutional strength of the UBA Group.

Elumelu’s tenure has been described as a defining chapter in the group’s history. Under his stewardship, UBA was transformed into a pan-African institution operating in 20 African countries and four global financial centres, serving over 50 million customers.

Similarly, Nnorom is a chartered accountant with over 40 years’ experience in banking, finance, and audit. He brings to the role extensive leadership experience and deep institutional knowledge of the financial institution.

Commenting on his retirement, Elumelu said, “Serving United Bank for Africa has been one of the great privileges of my career. UBA has established a unique competitive position across Africa and globally, and I leave the board with great confidence in UBA’s future. Emmanuel Nnorom is a leader of integrity, experience, and sound judgement, and I am confident that the bank will continue to thrive under his leadership.”

Also speaking on his appointment, Nnorom said, “I am honoured by the trust the board has placed in me and deeply conscious of the legacy I inherit. I look forward to working with my colleagues on the board, management, and our staff across all our markets to sustain UBA’s momentum and continue delivering long-term value to our shareholders, customers, and stakeholders.”

United Bank for Africa Plc, widely recognised as Africa’s global bank, operates across 20 African countries and has an active footprint in the United Kingdom, the United States of America, France, and the United Arab Emirates. UBA provides retail, commercial, and institutional banking services while leading financial inclusion through cutting-edge technology.

The financial group stands as one of the largest employers in the financial sector on the African continent, boasting 25,000 employees group-wide. Established in 1949, the UBA Group has evolved significantly over the last 75 years.

Meanwhile, at the close of trading on Monday, the share price of the financial giant gained N1.40, representing a 3.41 per cent increase to close at N42.40 from N41.00 at the start of trading for the day. Investors traded 13.768 million shares valued at N577.82m in 1,566 deals.

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