African governments are being urged to use existing tax revenues to support households and businesses struggling with higher fuel costs. According to ATMIN chief executive Ajay Oommen, this approach would help countries maintain supplies while directing assistance towards vulnerable families and small businesses that depend on diesel. Oommen's proposals address the competing effects of higher oil prices on African economies, where producers can earn more from crude sales, while consumers and businesses face higher costs for petroleum products.
Oommen's suggestions for Nigeria include strengthening fuel storage, expanding refining capacity, and improving access to foreign exchange. These measures would help the country benefit from stronger crude prices by increasing production and retaining more value through domestic processing. Nigeria's 2026 budget assumptions include an oil-price benchmark of $64.85 a barrel and production of 1.84 million barrels a day, according to official government figures. The Dangote refinery has helped Nigeria maintain fuel availability despite rising prices.
Oommen identified foreign-exchange constraints, insufficient strategic reserves, and limited refining capacity as three weaknesses governments need to address. Countries that export crude but depend on imported fuels expose themselves to disruptions elsewhere in the production and transport chain, he said. This dependence means Africa "imports other people's risk". Oommen favours targeted support financed from taxes governments already collect, rather than a windfall tax on energy companies benefiting from the Iran war.
A windfall tax is "not a good idea", Oommen argued, as additional levies could discourage investment by producers and refiners. Exploration and production companies commit capital to risky projects, while refinery developers also require incentives to expand capacity. Governments should preserve those investment incentives while helping consumers manage immediate costs. Oil producers, tanker owners, and refiners have benefited from the disruption, with higher crude prices, freight charges, and refining margins.
The International Energy Agency reported that members had released approximately 325 million barrels under their March emergency action, and still held about 1.1 billion barrels of publicly controlled emergency stocks. Oommen estimated that transporting a barrel of oil from West Africa to Europe, which previously cost about $2, had risen to between $6 and $8. Refining margins have also reached $45 a barrel. "So the consumers are the ones who are paying for it," he said.
Oommen pointed to Afreximbank's support for energy imports, infrastructure, and refining, including a $10 billion framework to help African and Caribbean economies manage the conflict's effects. Afreximbank also underwrote $2.5 billion of a $4 billion syndicated loan for Dangote Petroleum Refinery and Petrochemicals. ATMIN, majority-owned by Afreximbank, aims to retain more of the value generated by trading African commodities within the continent.
ATMIN handled more than $3 billion in trade during its first year of trading and expects to expand its activities with Afreximbank's support. The company can work with smaller Nigerian oil producers that struggle to finance production, move crude from their fields, and assemble commercially viable shipments. Oommen linked this approach to the objectives of former Afreximbank president Benedict Oramah, who supported a platform to finance smaller producers and retain commodity-trading value in Africa.
Key points
- ATMIN chief executive Ajay Oommen urges African governments to use existing tax revenues to support households and businesses struggling with higher fuel costs.
- Oommen opposes a windfall tax on energy companies, citing potential discouragement of investment by producers and refiners.
- Afreximbank provides support for energy imports, infrastructure, and refining, including a $10 billion framework to help African and Caribbean economies manage the conflict's effects.
