Written by Faith Jemosop a writter at Africa didest news, specializing in energy news, renewable energy , future of energy and climate change.
Mozambique has taken a bold leap forward in the African energy sector with a groundbreaking oil agreement that could reshape the region’s fuel economy and energy independence. The nation’s state-owned oil company, Petromoc (Petrarch), has partnered with Nigeria’s ITO Eastern to develop a modular oil refinery capable of processing 200,000 barrels of fuel per day.
This new deal is more than a handshake between corporations, it’s a major infrastructure commitment aimed at boosting fuel production for the entire Southern African region. The refinery will produce gasoline, diesel, naphtha, and jet fuel, reducing dependence on imported petroleum products and driving local economic growth.
A Strategic Move to Transform Energy Access
President Daniel Chapo has publicly hailed the project as “transformative,” emphasizing its potential to create new jobs, bolster economic resilience, and turn Mozambique into a regional hub for fuel production and energy distribution.
The announcement comes at a crucial time for Africa, where fluctuating global oil prices and limited refining infrastructure have left many countries dependent on costly imports. With this initiative, Mozambique is positioning itself to not only meet its own fuel demands but to also become a reliable supplier for neighbouring countries.
Why the Modular Refinery Matters
Traditional oil refineries can take years to build and cost billions. But the decision to invest in a modular refinery, a smaller, scalable, and more cost effective unit shows strategic foresight. Modular refineries are faster to deploy, easier to expand, and offer flexibility in how fuel is produced and distributed.
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At full capacity, the 200,000 barrel per day refinery will be one of the largest modular facilities on the continent. This level of output can significantly cut import bills for Mozambique, improve fuel availability, and stabilize domestic prices. In addition, by exporting surplus fuel, Mozambique can strengthen trade relationships across Africa and build a new stream of foreign revenue.
Economic and Job Creation Benefits
According to the government, the project is expected to generate thousands of direct and indirect jobs. Construction, transportation, maintenance, engineering, and logistics services will all experience a boost. It will also create business opportunities for local contractors and service providers in the oil and gas value chain.
Increasing local fuel production could have a multiplier effect across other sectors of the economy from agriculture and manufacturing to tourism and aviation all of which depend on affordable, accessible fuel.
President Chapo’s administration views the refinery not just as an energy project but as a national development milestone that supports Mozambique’s long term goals of industrialization, trade integration, and energy security.
Nigeria’s Role in Bringing ITO Eastern’s Experience
The deal also underscores growing South-South cooperation in Africa’s energy landscape. ITO Eastern, a Nigerian energy firm with experience in modular refinery projects across West Africa, brings both technical expertise and financial muscle to the table.
Nigeria itself has long struggled with refining capacity, despite being a top oil producer. However, recent successes in modular refineries within Nigeria including the commissioning of the Waltersmith refinery and the Dangote megaproject have positioned Nigerian firms as leaders in modular refinery technology.
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By collaborating with ITO Eastern, Mozambique is tapping into African-led innovation in oil infrastructure, rather than relying solely on Western or Asian partners. This partnership signals a shift toward intra-African investment and collaboration that could accelerate energy access across the continent.
Addressing Fuel Scarcity and Price Volatility
Mozambique, like many African countries, currently imports most of its refined petroleum products, making it vulnerable to global supply chain disruptions and volatile price spikes. In recent years, this has resulted in erratic fuel prices and periodic shortages that strain businesses and households alike.
A local refinery can help stabilize supply and pricing, making fuel more accessible for both urban and rural populations. This also gives Mozambique better control over its energy policy and pricing models, allowing the government to respond more effectively to economic shocks.
By securing local fuel production, the country reduces its reliance on foreign suppliers and creates a buffer against geopolitical tensions, such as those that recently impacted oil shipments due to conflicts in Eastern Europe and the Middle East.
Regional Impact and Continental Potential
While the refinery is being built in Mozambique, its benefits will extend beyond the country’s borders. Neighbouring countries particularly landlocked nations like Zimbabwe, Malawi, and Zambia often face high transportation costs for imported fuel. A nearby, high capacity refinery can serve as a cost effective source of fuel for these countries, encouraging cross-border trade and infrastructure development.
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This project also aligns with Africa’s broader push for energy independence, a goal echoed in regional frameworks such as the African Union’s Agenda 2063 and the African Continental Free Trade Area (AfCFTA). With better local refining capacity, Africa can retain more value from its natural resources, reduce foreign currency outflows, and promote sustainable economic growth.
A Glimpse Into the Future
This deal reflects the changing dynamics of Africa’s energy sector. Countries are moving from being mere exporters of crude oil to refining and adding value locally. The modular refinery trend is gaining traction because it suits African economies that need quicker returns on investment and adaptable infrastructure.
As energy demand continues to rise across the continent, Mozambique’s decision may set the precedent for other nations seeking smart, scalable energy solutions. It’s a powerful signal that Africa is ready to take control of its energy future one refinery at a time.
