Updated for January 2026 market conditions following Dangote ramp-up and global diesel oversupply.
Post-Dangote, Oversupplied Market Reality — A comprehensive, bank-credible analysis of diesel trading economics in the new West African landscape
This Diesel ROI Analysis presents a market‑adjusted, data‑driven assessment of a 20,000 Metric Tonne (MT) Low Sulphur Gas Oil (LSGO, 50ppm) cargo sourced FOB Dangote Refinery (Lekki, Nigeria) and distributed across selected West & Central African markets: Lomé (Togo), Ghana, Liberia, Gambia, and Chad.
Unlike legacy "scarcity‑driven" fuel models from 2024–2025, this analysis reflects the post‑Dangote, oversupplied 2026 market reality, where returns are driven by:
Optimised supply chains
Secondary market advantage
Euro‑V specification
Regulatory compliance
Objective: Present bank‑credible, investor‑defensible ROI expectations under current market conditions.
| Metric | Value |
|---|---|
| Cargo Size | 20,000 MT |
| Density (Base Case) | 0.845 kg/L (ICE Standard) |
| Total Volume | ~23.67 million litres |
| Supply Source | Dangote Refinery – FOB SPM, Lekki |
| Markets Covered |
TG
GH
LR
GM
TD
|
| Cost Basis (Option A) | ~$17.33M |
| Cost per Litre | ~$0.732/L |
Fuel is traded in metric tonnes but monetised in litres. Density variance directly affects revenue and margin calculations.
Litres = Mass (kg) ÷ Density (kg/L)
| Density Tier | Density | Total Litres | Comment |
|---|---|---|---|
| Low | 0.83 | ~24.10M L | Upper yield bound |
| Mid (Base Case) | 0.845 | ~23.67M L | Lender reference |
| High | 0.86 | ~23.26M L | Conservative downside |
Variance Range: ~840,000 litres (±1.7–3.6%)
This model uses FOB pricing, reflecting confirmed Dangote commercial terms.
| Cost Component | Total (USD) | Notes |
|---|---|---|
| FOB Product | $14,100,000 | ICE LSGO + refinery premium |
| Performance Bond – Dangote (5%) | $705,000 | Refundable |
| Performance Bond – Bolyx (1%) | $171,554 | Refundable |
| Operational & Regulatory | $1,650,400 | Nigeria port & compliance |
| Freight (Lekki → Lomé) | $600,000 | MR tanker market rate |
| Brokerage | $100,000 | Tier‑3 |
| Total Transaction Cost | $17,326,954 | ~$866/MT |
| Cost per Litre | ~$0.732/L | Base case |
Note: LC‑based financing (Option B) adds ~1% cost and reduces margins marginally but improves capital efficiency.
Dangote Refinery has materially increased regional diesel supply
Indian & Russian exports (~800,000 MT/month) have compressed coastal margins
Diesel markets shifted from scarcity‑driven pricing to logistics‑driven arbitrage
5% petroleum surcharge introduced January 2026 (Nigeria)
Increased transit levies across Sahel corridors
FX volatility remains a material risk factor
This analysis explicitly accounts for these realities and avoids overstated price assumptions.
Prices vary significantly by geography, regulation, and logistics distance from ports.
| Market | CIF / Pump Price Range | Market Status |
|---|---|---|
|
🇹🇬
Lomé (TG)
|
~$1.05–1.23/L | Regulated & stable |
|
🇬🇭
Ghana
|
~$1.10/L | Volatile, tightening margins |
|
🇱🇷
Liberia
|
~$0.92–1.15/L | USD‑based, monitor closely |
|
🇬🇲
Gambia
|
~$1.05–1.21/L | Verified, moderate margins |
|
🇹🇩
Chad
|
~$0.90–1.32/L | Landlocked premium |
Using the base density (0.845 kg/L) and Option A cost basis:
Realistic Base Case
Where Applicable
Optimised Logistics
Returns above these ranges require documented logistics, quality, or policy advantages.
| Factor |
Dangote Refinery
|
Indian / Russian Imports
|
|---|---|---|
| Transit Time | 2–5 days | 21–30 days |
| Freight Distance | Short‑haul | Long‑haul |
| Quality | Euro‑V, consistent | Variable |
| Inventory Risk | Low | High (floating storage) |
| Capital Velocity | High | Slower |
Dangote's edge is speed, freshness, and inland reach, not absolute price.
Distance from coast amplifies advantages
Consistent demand, contract pricing
High capital velocity
Euro‑V differentiation
Margins compressed by imports
Supply is no longer constrained
Volatility requires dynamic modelling
2026 Competitive Positioning
As of January 2026, West and Central African diesel markets are shaped by two dominant supply forces:
Understanding the structural differences between these supply sources is essential for investors, offtakers, and policymakers assessing sustainable profitability.
| Metric | Dangote Refinery | India / Russia Exports |
|---|---|---|
| Typical Diesel Flow | Continuous regional supply | Large, periodic cargo dumps |
| Estimated Volume (2026) | ~5–6 million litres/day | ~800,000 MT/month into W. Africa |
| Supply Pattern | Just-in-time, short-cycle | Lumpy, price-disruptive |
Implication: Dangote supports predictable planning; imports introduce price volatility.
| Factor | Dangote Supply | India / Russia Supply |
|---|---|---|
| Average Transit Time | 2–5 days | 21–30 days |
| Voyage Distance | 450–1,100 nautical miles | 6,000+ nautical miles |
| Freight Sensitivity | Low–moderate | High (charter & bunker costs) |
| Inventory Risk | Minimal | High (floating storage) |
Competitive Insight: Faster turnaround improves capital velocity and reduces mark-to-market risk.
| Element | Dangote | India / Russia |
|---|---|---|
| Crude Cost | Market-linked | Discounted (sanctioned barrels) |
| Ex-Refinery Pricing | Transparent formula (ICE LSGO + premium) | Opportunistic / cargo-driven |
| Freight Cost per MT | Lower (short-haul) | Higher (long-haul) |
| Ability to Undercut | Limited but stable | High during glut periods |
Reality Check: Indian and Russian suppliers can temporarily match or beat Dangote on coastal prices during oversupply periods.
| Attribute | Dangote Diesel | Imported Glut Diesel |
|---|---|---|
| Sulphur Content | Euro-V (≤50ppm) | Variable; often higher |
| Consistency | High | Inconsistent by cargo |
| Generator / Engine Impact | Optimised for modern equipment | Potential long-term wear |
| Industrial Acceptance | Preferred for captive power | Often discounted |
Strategic Advantage: Quality differentiation enables contract pricing and industrial offtake.
| Market Type | Dangote Advantage | Import Limitation |
|---|---|---|
| Coastal Ports | Moderate | Strong (during gluts) |
| Secondary Cities | Strong | Weak |
| Landlocked (e.g. Chad) | Very strong | Structurally disadvantaged |
Key Insight: Distance from the coast amplifies Dangote's competitiveness.
| Risk Factor | Dangote Supply | India / Russia Supply |
|---|---|---|
| Price Volatility | Moderate | High |
| Policy Exposure | Regional | Sanctions / geopolitics |
| FX Exposure | Lower (regional flexibility) | High (USD settlement) |
| Regulatory Alignment | ECOWAS-compatible | External |
Dangote is not a price-war asset; it is a logistics and reliability asset
Imported diesel dominates only at the coast and only during gluts
Sustainable ROI in 2026 comes from: Inland distribution, Quality-based contracts, Faster inventory turnover
The winning strategy is not to compete head-on with Indian or Russian cargoes at port — but to outpace them inland, in time, quality, and execution.
This analysis demonstrates that diesel trading in 2026 remains profitable, but only for participants who adapt to the new reality:
Margins are earned through logistics intelligence, policy awareness, and disciplined execution — not scarcity.
Bolyx Multi-Investment's model is positioned for this environment by anchoring supply to Dangote Refinery, applying bank-standard density and pricing assumptions, and focusing on markets where structural advantages still exist.
This document is an indicative feasibility analysis based on publicly available data as of January 2026. Commodity prices, freight rates, FX, and regulations are volatile. Figures are not guarantees of performance and should be independently verified before any investment or financing decision.
2026 Base Case
This section evaluates worst-case downside resilience of the Dangote-linked LSGO trading model versus Indian/Russian import alternatives under adverse market conditions. The intent is to demonstrate capital preservation, liquidity survival, and margin defense, not upside optimisation.
Spot LSGO
$683/MT
Export Premium
+$20/MT
Dangote FOB Equivalent
$703/MT
The Dangote-linked model is defensive-first — designed to survive adverse cycles where import-dependent traders are forced to halt operations.
Margin Sensitivity at ±$30/MT Price Movements
(Indicative, USD/MT, before tax)
| Scenario |
Dangote (Inland)
|
Dangote (Coastal)
|
Indian Import (Inland)
|
Russian Import (Inland)
|
|---|---|---|---|---|
| +$30/MT | +$85 | +$55 | +$70 | +$75 |
| +$15/MT | +$70 | +$40 | +$50 | +$55 |
| Base Case (0) | +$55 | +$25 | +$30 | +$35 |
| –$15/MT | +$40 | +$10 | +$10 | +$12 |
|
–$30/MT (Stress)
|
+$22 | +$2 | –$8 | –$5 |
At –$30/MT, Dangote inland economics remain viable, while imported barrels fall below breakeven.
Upside becomes optional, not required, for viability
Maximise distance advantage
Industrial / mining contracts
Avoid price volatility zones
Via escrow or controlled accounts
This stress test is designed to satisfy credit committees and investment risk officers evaluating downside resilience rather than headline returns.
One-page takeaway for investors, bankers, and decision-makers
Your Bolyx export-driven model is structurally sound. The core logic, density modeling, and FOB pricing are credible and defensible.
Domestic Nigerian diesel ROI models are NOT comparable to your export model. Critics benchmarking against Nigerian retail are using irrelevant metrics.
2026 is no longer a scarcity market. It is now a logistics, quality, and policy-arbitrage market. Strategy must adapt accordingly.
This is not a price war — it is a time, quality, and inland-logistics war. Dangote wins on turnaround, freshness, and reach.
Coastal: 20-30% | Inland: 30-45%
Requires distribution control or regulated pricing
Important: Anything above these ranges must be justified by documented route advantages, quality premiums, or policy leverage. Claims of >80% ROI without such justification are not credible in the 2026 market.
What your model gets right, and where adjustments are required for 2026 credibility
Aligns with ICE LSGO standards and lender expectations. Bank-credible reference point.
~$705/MT FOB + landed ~$866/MT is realistic and internally consistent with refinery terms.
Togo, Ghana, Liberia, Gambia, Chad — critical distinction. Critics benchmarking against domestic Nigerian retail are using irrelevant metrics.
Still valid in 2026 — but only with logistics discipline and route optimization.
Indian/Russian oversupply has compressed coastal margins. Ghana and Lomé cannot be treated as high-spread markets anymore.
Any ROI model assuming >$80–100/MT spread without justification is now outdated in the oversupplied market.
The 5% petroleum surcharge (Jan 2026) is real. Models ignoring it are overstated by 5–7%.
Bottom Line: Your core model is sound, but margin expectations must be adjusted downward to reflect 2026 realities.
Strategic guidance for navigating the oversupplied 2026 diesel market
Imported diesel loses its freight advantage beyond the coast.
Sell engine protection, uptime, and lifecycle cost — not just litres.
Faster velocity = higher annualized ROI, even at lower per-trade margins.
If they want to attract capital to the regional fuel distribution sector
Investors fear FX volatility more than price drops.
Stable FX + clear tax regime
= lower risk premium
= cheaper capital inflow
Clear dos and don'ts for deploying capital in West African diesel markets
Margins are compressed due to Indian/Russian oversupply. Not sustainable.
Scarcity-era returns are no longer achievable. Market has fundamentally shifted.
Transit levies, surcharges, and checkpoint costs erode margins quickly.
Structural oversupply is here to stay. Plan for the new normal.
Reliable, consistent quality, fastest turnaround in the region.
Where imported diesel loses its freight advantage. Margins protected.
Faster capital velocity compensates for lower per-trade margins.
Conservative reserves protect against volatile environments.
Corrected, realistic ranges based on current market conditions
|
Segment
|
ROI Range
|
Comment
|
|---|---|---|
|
Coastal Wholesale
Lomé, Tema, Monrovia ports
|
20% – 30% | Highly competitive due to import glut |
|
Inland Wholesale
Northern Ghana, Gambia secondary
|
30% – 45% | Logistics-dependent — where imported diesel loses advantage |
|
Retail / Captive
Regulated markets, industrial offtake
|
40% – 70% | Requires distribution control or regulatory advantage |
|
Chad (Optimised)
Capital + provincial corridors
|
35% – 60% | High risk / high reward — landlocked premium still valid |
Your website figures are defensible only where logistics, quality, or regulation justify them:
Where the regional diesel market is heading
Diesel margins will not return to scarcity levels
The era of easy spreads is over
Volume, not price, will drive returns
Throughput velocity matters more than per-unit margin
Refinery-linked supply chains will dominate
Dangote anchoring is a competitive advantage
Import arbitrage will shrink further
Regional refining capacity continues to grow
| Factor | Dangote Refinery | Indian / Russian Imports |
|---|---|---|
| Transit Time | 2-5 Days | 21-30 Days |
| Freight Distance | Short-haul | Long-haul |
| Quality | Euro-V, consistent | Variable |
| Inventory Risk | Low | High (floating storage) |
| Capital Velocity | High | Slower |
Key Insight: Dangote's edge is speed, freshness, and inland reach — not absolute price. This is a time-quality-logistics war, not a price war.
It is early-stage and optimistic, but structurally correct.
How value is extracted — it's no longer about:
But rather:
Ready to explore the detailed ROI analysis with verified January 2026 market data?
This document is an indicative feasibility analysis based on publicly available data as of January 2026. Commodity prices, freight rates, FX, and regulations are volatile. Figures are not guarantees of performance and should be independently verified before any investment or financing decision. Past performance does not guarantee future results. Consult with qualified financial and legal advisors before making investment decisions.