Justice Malala: Africa’s energy vulnerability exposed as war shakes fuel markets

Key topics:Energy shock exposes Africa’s refining and import dependenceUnderinvestment leaves oil exporters reliant on imported fuelsPush for refineries and intra-African trade as key solution.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Justice Malala.Oil, oil is everywhere in Africa. Without domestic refineries, though, not a drop is available for local gas tanks. The energy shock resulting from the Iran war is a warning to the continent to accelerate development of its infrastructure, and intensify intra-African trading. Decades of underinvestment have left Africa — a significant exporter of crude oil, but reliant on refined petroleum products from Saudi Arabia, Kuwait, Oman, United Arab Emirates, Bahrain and others — more exposed to higher domestic fuel, food and electricity costs than it needs to be. That vulnerability is acute and the pain is being felt on the ground. Last week, as queues snaked around gas stations ahead of record price increases and dozens of the country’s 4,600 fuel stations ran out of petrol and diesel, South Africa’s government scrambled to announce cuts in fuel taxes to cushion consumers’ pain. In Nigeria, Africa’s biggest oil producer, citizens were slapped with a 65% price spike, the largest among major African economies. Motorists had to contend with two price hikes in just two days.Governments from Cape Town to Cairo are slashing fuel levies, introducing work-from-home orders, imposing curfews, tightening border rules to frustrate fuel smuggling or, as happened with Egypt and Libya, striking emergency deals with oil-rich neighbors to secure supplies. They’re all trying to find ways to deal with what Ferdinand Marcos Jr., president of the Philippines, characterized as being “victims of a war that is not of our choosing.”.Read more:.Joan Swart: Africa's energy fragility laid bare by Iran War.Africa may not have chosen this war, but it could have done more to cushion citizens against its effects. This crisis exposes a deep structural vulnerability: being a net importer of refined petroleum products despite exporting a significant amount of crude oil. The continent either never built sufficient refining capacity or, in cases like South Africa, has allowed refineries to shut due to political myopia, environmental concerns or uncompetitive economics. Lungile Mashele, an energy economist with South Africa’s state-owned asset firm Public Investment Corporation, says the country has made itself totally reliant on foreign suppliers and volatile global markets: “South Africa’s energy crisis isn’t just misfortune; it’s the direct result of reckless, politicized and shortsighted decisions,” she said last month. The same applies to oil-rich Nigeria. Decades of mismanagement, neglected maintenance of the four state-owned refinery plants, deep corruption and lackadaisical political leadership have led to delays in the rehabilitation of existing refineries and the launch of new projects. Even the country’s current lifesaver — the privately owned 650,000-barrels-a-day Dangote Group refinery — was delayed by seven years before production finally began in 2024. Nigeria’s case is particularly tragic given that, apart from being Africa’s top oil-producing nation, the country ranks among the top 15 to 20 producers globally. Nigeria’s people shouldn’t be queueing for expensive fuel or fearing shortages as they have been these past four weeks.Angola, sub-Saharan Africa’s second-largest oil producer, currently has only one operating refinery in the capital Luanda handling 72,000 barrels a day despite pumping crude since 1956; at least 70% of its fuel is imported. Ghana, producing about 70,000 barrels a day since 2010, also imports 70% of its refined fuel. South Africa’s refining capacity has declined from six refineries producing 700,000 barrels per day five years ago to just two refineries processing a bit more than 200,000 barrels. Oil companies balked at restarting these refineries after the government insisted on upgrades compliant with expensive new European Union environmental standards. Africa’s woes shouldn’t just elicit despair, though. They also underline the opportunities. Nigeria’s Dangote Group said this week it’s seeking $40 billion to expand in the next five years, including doubling its refinery capacity and quadrupling fertilizer output. The African Energy Chamber says the scope for investment in large-scale, modern refining projects such as the Dangote plant is significant. It also calls for expanded regional trade. “The African Continental Free Trade Area offers a platform to expand intra-African energy trade, strengthening supply resilience and generating economies of scale,” it said in its 2026 energy outlook, released weeks before the US-Israel attacks on Iran commenced. While the continent has been a victim of global forces before — think Covid-19 vaccine inequity, or the negative economic consequences of Russia’s war on Ukraine — unlike in recent crises, it could have averted some of the current pain if it had invested in key infrastructure projects and ramped up intra-African oil trade. The numerous initiatives taken by African nations recently to cushion their people from the worst effects of the current energy crisis are admirable. But they’re Band-Aids, rather than building a proper shield against the immense risk of the next energy shock. .Read more:.The Economist: Even the best-case scenario for energy markets is disastrous.The current difficulties are a reminder of the consequences of not pursing energy independence despite an abundance of oil riches — and a warning to be better prepared for the next disruptive incident waiting to happen in today’s strained geopolitical environment. .© 2026 Bloomberg L.P.

Justice Malala: Africa’s energy vulnerability exposed as war shakes fuel markets

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