Africa's Fuel Price Balancing Act Amid Global Oil Volatility

As geopolitical tremors in the Middle East continue to rattle global oil markets, Africa faces renewed pressure on its fragile energy supply chains. With global crude prices rising sharply—driven by escalating tensions in the Persian Gulf, disruptions in the Red Sea, and OPEC+ output restraint—the cost of fuel across African countries is again under scrutiny. The coming weeks may see significant increases in pump prices across the continent, testing the resilience of economies already burdened by inflation, currency depreciation, and weak refining infrastructure.

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Analysts from FGE estimate that global diesel supply could shrink by 100,000 barrels per day this year while gasoline supply may drop by 180,000 bpd. In contrast, African demand for these key transport fuels continues to grow, driven by population growth, urbanisation, and industrial expansion.

Global Crude Price Volatility: A Contagious Effect

Brent crude, the international benchmark, has hovered near or above $80 per barrel in recent weeks, with forecasts suggesting further spikes if regional hostilities in the Middle East escalate. Attacks on shipping lanes, production site sabotage, and the strategic jostling between Iran, Israel, and the United States have heightened fears of supply disruptions. As global refiners and traders respond with caution, refined product prices—especially diesel and petrol—have surged.

For many African countries that depend heavily on imported refined petroleum products, this trend has immediate implications. Unlike oil-exporting giants like Nigeria or Angola, most African nations lack sufficient refining capacity and must pay international prices for finished fuel products. Thus, the global squeeze translates directly to pump prices at home.

Africa’s Refining Deficit: A Persistent Weak Link

Despite being rich in hydrocarbons, Africa suffers from chronic underinvestment in domestic refining. The continent currently has around 40 refineries, but many operate below capacity or are offline due to neglect and funding shortfalls. Nigeria, for instance, Africa’s top oil producer, has historically imported up to 90% of its refined fuel.