Fuel is relatively expensive in Zambia compared to other countries in the region. This in turn produce high transportation costs, exchange rate fluctuations, and supply chain interruptions. Currently, Zambia imports the majority of its refined petroleum products through three key regional corridors. One of these corridors is the Dar es Salaam pipeline in Tanzania, which sources its supply from the 1960’s 1960s-built Tanzania pipeline.
Zambia seeks trade ties with Nigeria’s Dangote oil refinery to put an end to its decade-long fuel supply crisis. The agreement, if it comes through, will change the energy destiny of Zambia, reduce the cost of fuel, and be a prime model of intra-African trade. With fuel shortages threatening Zambia’s economy, a long- term solution is a direct import agreement with the world’s biggest single-train refinery. It is not just a trade agreement, but one that signals Africa standing on its own two feet, and aware of economic self- sufficiency and stability.
The Tanzanian pipeline suffered from leakages, inefficiencies, and chronic supply irregularities. Recent efficiencies, such as the application of Drag Reducing Agents (DRA), have enhanced its efficiency to produce more efficient diesel supplies. The Beira corridor in Mozambique is similarly threatened by a host of issues, including political instability and poor infrastructure, which is a contributing factor to fuel flow anomalies. Walvis Bayin Namibia, although fairly stable, is far away and costly, which helps to sustain high fuel prices in Zambia.
Apart from transportation problems, Zambia’s fuel sector is similarly vulnerable to global price volatility. The volatility of the Kwacha against the US dollar exacerbates fuel price instability. For instance, in March 2022. the Energy Regulation Board (ERB) increased pump prices by K4.45 per liter for petrol and K4.68 per liter for diesel to offset the rising global oil prices and the weakening exchange rate. Zambia’s economy, driven by industries like transportation, agriculture, and mining, is severely impacted by fuel volatility, leading to an increase in the cost of production and reduced competitiveness. High fuel prices burden the common man with an increase in transportation and commodity costs, worsening economic hardship. Amidst these challenges, Zambia seeks a stable and affordable alternative, and Dangote Refinery could be the solution.
The Dangote oil refinery, commissioned on May 22, 2023, is a game-changer in the African energy industry. Located in the Lekki Free Trade Zone in Nigeria, this $19 billion giant refinery is the largest single-train refinery globally, boasting a 650,000 barrels- per-day refining capacity and 4.742billion liters of oil storage capacity in tank farms. Before its construction, Nigeria, the continent’s largest crude oil producer, relied heavily on importing petroleum products due to its limited refining capacity.
However, the Dangote Refinery has not only reduced this dependence but also transformed Nigeria into a major fuel exporter in Africa and globally. Notably, in 2025, the refinery had already begun exporting jet fuel to the United States, with exports surpassing two million barrels, solidifying its position as a global energy giant. In Zambia, importing fuel from the Dangote refinery offers numerous excellent benefits.
Firstly, it would lead to a decrease in fuel costs. Sourcing oil from an African supplier would eliminate excessive transportation fees associated with importing oil from Europe or the Middle East, resulting in lower pump prices. This reduction in fuel costs would alleviate economic burdens, on businesses and consumers. Secondly, the partnership would provide Zambia with a reliable supply of fuel, thereby ending the country’s history Of inconsistent shortages and delays caused by geopolitical tensions. Also, making a long-term deal with Dangote Refinery would give Zambia a stable and secure source of fuel, shielding the country from external shocks.
On the bright side, the economic advantages of such an arrangement are substantial. Lower fuel prices would stimulate Economic activity by reducing operational costs for key industries like transportation, manufacturing, and agriculture. This would also reduce fuel subsidies, freeing up funds for investment in education, health, and infrastructure. Furthermore, are liable fuel supply would attract foreign investment, as companies prefer to invest in countries with stable business conditions. If this deal is successful, it could also lead to investments in Zambia’s local fuel storage and distribution units, creating a robust supply chain and generating employment opportunities in the Country.
Apart from economic benefit, the action is one towards Pan- African economic integration. African countries have long been reliant on foreign markets for raw materials, a legacy inherited from colonial trade relationships. The African Continental Free Trade Area (AfCFTA), which started trading in 2021, aims to remove such barriers and promote intra-African trade. By deciding to purchase fuel from Nigeria rather than the rest of the world, Zambia is taking a bold step towards achieving this economic aspiration. A Success full deal would be a benchmark for other nations in Africa, affirming the continent’s ability to generate its own fuel and reduce dependence on foreign suppliers.
Market players have also weighed in on the likely impact of the deal. Economists say making Dangote Refinery a major supplier in Zambia would increase competition in the local fuel market, ending monopolies and reducing price volatility. The presence of a new player who is of a lower cost can induce other established fuel importers to lower prices, thereby passing the advantage to the consumers.
Aliko Dangote, the proprietor of the refinery, has, on various instances, emphasized that the wealth of Africa should be kept on the continent. The refinery would be built with the vision of weaning Africa from foreign- refined oil, and the cooperation with Zambia would form part of the steps towards making it a reality.
Analysts also fore cast that if such an arrangement existed, other African landlocked nations would, in turn, follow suit, leading to intra-African trade and economic progress in the continent.
A study reveals that Zambia’s importation of affordable and reliable fuel from Nigeria might pave the way for similar agreements to be signed across Africa. This development will ease Africa’s dependency on the global markets, and also enhance economic ties among African nations
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