Oil Refiners: Africa’s Crude Demand to Jump from 1.8m Bpd to 4.5m Bpd by 2050

Say continent will require over $100bn in investment to achieve feat

Making fuels cleaner in Africa to gulp $16bn

Emmanuel Addeh in Abuja

The African Refiners and Distributors Association (ARDA), has said that the continent’s crude oil consumption will surge from about 1.8 million barrels per day in 2024 to as much as 4.5 million barrels per day by 2050,  positioning the continent’s downstream energy sector as one of the world’s most significant untapped investment frontiers.

Executive Secretary, ARDA, Anibor Kragha, in a statement, explained that by 2050, one in every four people on earth is expected to live in Africa, intensifying demand for transportation fuels as well as Liquefied Petroleum Gas (LPG) and other refined petroleum products.

However, despite rising consumption, Africa, he said, continues to rely heavily on imported refined products, exposing domestic markets to price volatility, foreign exchange pressures and supply disruptions.

To close this gap and meet future demand, the association estimated that Africa will require more than $100 billion in refining investment between now and 2050. This, it said, includes refinery upgrades, capacity expansions and new greenfield projects capable of supplying cleaner fuels at scale.

However, ARDA stressed that demand growth alone is not enough to attract investment, highlighting that downstream projects across the continent frequently fail to advance beyond the planning stage because they do not meet the basic bankability requirements of international investors.

One of the most critical barriers identified by Kragha was the lack of harmonised fuel specifications. Across Africa’s 54 countries, he said 46 maintain national fuel standards, resulting in 12 different petrol grades and 11 diesel grades.

Sulphur levels, he emphasised, range from as low as 10 parts per million to as high as 2,500 ppm for petrol and up to 10,000 ppm for diesel, noting that this fragmentation restricts regional fuel trade, prevents economies of scale and complicates refinery investment decisions.

ARDA estimated that upgrading existing African refineries to meet cleaner, harmonised fuel standards would require about $16 billion in investment. While significant, the association said this cost would unlock regional markets, reduce supply-chain inefficiencies, improve public health outcomes and align Africa with global fuel norms.

Besides, it said that infrastructure constraints further compound the problem, highlighting a 2024 whitepaper  by CITAC and Puma Energy, which cites widespread logistical weaknesses across the continent, including shallow ports which are unable to handle large vessels, congested berths, inadequate storage capacity, and over-utilised road and pipeline networks with multiple single points of failure.

Collectively, these shortcomings, the organisation said, add between $20 and $30 per tonne to the landing cost of fuel in African markets, eroding affordability and investor confidence.

“Crude oil consumption in Africa is set to rise from 1.8 million barrels per day in 2024 to 4.5 million barrels by 2050. Yet downstream investment has stagnated even as upstream production grows, leaving Africa stuck in the costly paradox of exporting crude and importing refined products at a premium.

“OPEC estimates that Africa will need over $100 billion in refining investment between now and 2050 – a mix of upgrades, expansions and greenfield projects in order to meet the continent’s booming demand for petroleum products over the same period. The opportunity is immense. But the barriers are equally real.

“Across the 54 African countries, 46 maintain national fuel specifications, yet the continent still has 12 different gasoline grades with sulphur levels ranging from 10 to 2,500 ppm, and 11 diesel grades ranging from 10 to 10,000 ppm.

“ Closing these gaps is essential: upgrading existing African refineries to meet cleaner fuel standards would require about $16 billion – an investment that would unlock regional trade, improve efficiency and create economies of scale,” Kragha stated.

While new refining capacity is coming onstream, including large-scale facilities such as the Dangote refinery, Kragha cautioned that refining expansion alone will not resolve Africa’s downstream challenges.

The continent, he said, continues to struggle with moving fuel efficiently from coastal import and refining hubs to inland consumption centres. Inefficient and incomplete supply chains, he noted, particularly to mining and industrial zones,  continue to constrain economic growth.

In addition, the association said it was working to build a pipeline of investable downstream projects with clearly defined feedstock and offtake structures, supported by technical workgroups covering refining, storage, LPG, regulation, sustainable finance, health and safety, and human capital development.

“More than one billion Africans still rely on biomass for cooking, and the number has grown by 220 million since 2010. The health, environmental and social consequences are enormous – and so is the opportunity. The scale of unmet demand positions Africa as one of the most attractive markets for LPG investments globally.

“The conclusion is unavoidable: Africa must modernise its downstream industry to attract global capital, and ARDA is leading this transformation,” he pointed out.

Kragha listed ARDA’s blueprint for investment-ready downstream markets, including harmonising fuel specifications; rebuilding infrastructure end-to-end; embedding regulatory and investment discipline; delivering clean cooking at scale as well as building a pipeline of bankable projects.

“Africa’s downstream sector is one of the world’s last large-scale, high-growth energy investment frontiers. The demand curve is defined by demographics. The supply deficit is structural. The capital requirement exceeds $100 billion. And the economic upside is transformative,” he added.