By Isqil Najim
For the first time in four decades, Ethiopia has imported petroleum using its own national shipping company from the Dangote Petroleum Refinery on Lagos’s Lekki Free Zone. It is a milestone that speaks as much about Nigeria’s growing industrial muscle as it does about Ethiopia’s changing energy strategy.
The deal, executed by the Ethiopian Shipping and Logistics Services Enterprise, known as ESL, saw 120,000 metric tonnes of fuel shipped from the Dangote terminal in Lekki to the Horizon Oil Terminal in Djibouti, which serves as Ethiopia’s main gateway for fuel imports. The cargo consisted of 80,000 metric tonnes of aviation fuel and 40,000 metric tonnes of diesel, transported across three voyages aboard the vessels MV Kokolight, MT Mostar, and MT Explorer.
It marks the first time Ethiopia has sourced petroleum from within Africa. For most of its modern history, the landlocked country has depended on suppliers in the Middle East and, more recently, western India. That arrangement has now been disrupted and Dangote’s refinery is the beneficiary. .
Why Ethiopia turned to Nigeria
Since late February this year, a conflict involving the United States, Israel, and Iran has effectively choked the Strait of Hormuz, the narrow waterway through which roughly 20 percent of the world’s oil supply passes. For Ethiopia, which imports nearly all its fuel and spends at least a quarter of its entire goods import budget on petroleum, the disruption was severe.
Ethiopian Airlines, one of the continent’s largest and most active carriers, operates out of Bole International Airport in Addis Ababa. The airline’s appetite for jet fuel is enormous, and Ethiopia’s storage infrastructure for aviation fuel is far less developed than its capacity for diesel and petrol. When Hormuz became unreliable, Ethiopia needed a different source quickly.
Lensa Geremew, head of the Chartering Division at ESL, confirmed that the Hormuz crisis created the conditions that made the Nigeria import both necessary and possible. “In response to favourable conditions created by the government, the company was able to import 120,000 metric tonnes of aviation fuel and diesel fuel for the first time in four decades,” she said.
Who is ESL, and why does this matter?
ESL is Ethiopia’s state-owned shipping and logistics company. For approximately 40 years — since around 1986 — it had not handled any petroleum imports on behalf of its customers. That responsibility had rested entirely with the Ethiopian Petroleum Supply Enterprise, EPSE, the country’s sole state oil importer until last year.
The fact that ESL has now re-entered the picture, and done so with a shipment sourced from Nigeria, represents what the company describes as a deliberate effort to correct a long-standing misperception about its capabilities.
“There was a perception that ESL lacked the capacity to handle oil imports,” said Demissew Benti, head of ESL’s Market Department. “This latest development is part of our effort to correct that misunderstanding and establish a new operational precedent.”
Dangote’s refinery at the centre of it all
The Dangote Petroleum Refinery, owned by Africa’s richest man Aliko Dangote and located in the Lekki Free Zone in Lagos State, began refining operations in 2024. It currently processes approximately 650,000 barrels of crude oil per day and has announced plans to double that capacity. The refinery is the largest single-train petroleum refinery in the world.
The Dangote refinery has long been spoken about in terms of what it could mean for domestic fuel prices and Nigeria’s dependence on imported petrol. Ethiopia’s purchase adds another dimension: that the refinery is now a continental energy supplier, not merely a domestic one.
Ethiopia’s fuel import bill stood at an estimated 3.7 billion US dollars for the 2024/25 budget year and is projected to rise by nearly nine percent before the current budget year closes. The Hormuz crisis has complicated matters further. Finance Minister Ahmed Shide, presenting figures to parliament this week, said the central bank anticipates that fuel imports could reach as high as six billion US dollars in the coming budget year — an increase driven almost entirely by price pressures from the regional conflict.
In response, the Ethiopian government has moved on several fronts. It has liberalised the oil import sector, allowing private companies to participate for the first time. It has also issued a directive permitting foreign investors, diplomatic missions, and international non-governmental organisations to import fuel using their own foreign currency — a step aimed at reducing the pressure on Ethiopia’s foreign exchange reserves.
The country’s fuel subsidy, which previously covered a broader range of beneficiaries than the government intended, is also being restructured. A subsidy of 272 billion birr was spent in the current budget year, far above the 100 billion birr initially planned. For the coming year, the government has proposed a much reduced 20 billion birr subsidy, signalling a firm intention to wind the support down gradually.
What this means for Africa
Ethiopia’s purchase from the Dangote refinery is a small transaction in the context of global oil markets, but its symbolic weight is considerable. An African country facing a supply crisis did not turn to Saudi Arabia or the United Arab Emirates. It turned to Nigeria.
That is the kind of intra-African trade that the African Continental Free Trade Area was designed to encourage. Whether it becomes a regular pattern or remains a crisis-driven anomaly will depend on the reliability of the refinery’s supply, the competitiveness of its pricing, and the willingness of African governments to build the infrastructure needed to support continent-to-continent energy trade