THE OUTLOOK FOR AFRICAN REFINERIES

Africa’s refineries are unable to meet the region’s increasing demand for petroleum products. Investment in this critical sector would reduce dependence on imports, ease the burden on public finances from subsidies, and create new job opportunities. This article examines the current state of African refining and the benefits of increasing capacity through private investment.

Originally published as part of the Centurion Knowledge Series on August 24, 2016

Africa is the continent with the least number of oil refineries in the world, an under-utilized 46, in a highly competitive market where a single country, the United States of America has about 140 refineries. As the world’s fastest growing oil consumer, with the IEA projecting consumption of 4.5 million barrels per day by 2018, this disadvantage in refining capacity is crippling.

Despite the fact that Africa produces 3.5 times the amount of oil that it consumes (according to an article by Evaluate Energy), the continent’s oil producers rely on fuel imports to supplement their own production, as the refinery capacity to keep up with…