Nigeria’s downstream petroleum sector is approaching a potential turning point as domestic refiners intensify efforts to cut petrol imports and supply a larger share of the country’s fuel needs locally in 2026.
Industry operators say installed refining capacity within the country is now sufficient to meet national demand, provided long-standing bottlenecks around crude oil supply, financing, and regulatory alignment are addressed.
Recent industry data shows that petrol imports continued to dominate Nigeria’s fuel supply in 2025, despite the commencement and gradual ramp-up of operations at the 650,000 barrels-per-day Dangote Petroleum Refinery and the presence of several modular refineries across the Niger Delta.
However, local refiners insist that the trend is set to reverse this year.
Officials of the Crude Oil Refiners Association of Nigeria (CORAN) argue that the persistent reliance on imports is not a reflection of inadequate refining infrastructure but rather the result of limited access to crude oil feedstock and systemic market distortions.
Domestic refiners move to cut petrol imports amid feedstock constraints
At the heart of the push by operators to reduce petrol imports is the issue of crude oil availability. CORAN maintains that most local refineries are operating far below capacity, not because of technical limitations, but due to inconsistent crude supply arrangements.
According to industry estimates, Nigeria consumed approximately 18.97 billion litres of Premium Motor Spirit (PMS) in 2025.
Of this volume, oil marketing companies imported about 11.85 billion litres, representing over 62 per cent of total consumption.
Domestic refineries accounted for the remaining 37.5 per cent, despite a combined installed capacity capable of producing significantly more.
The association’s spokesperson explained that even the Dangote refinery, currently the largest in Africa, has struggled to sustain optimal production levels due to feedstock challenges.
While the facility has demonstrated the ability to produce up to 50 million litres of petrol daily, it has not consistently operated at full capacity.
Several modular refineries face similar constraints. Facilities with capacities ranging from 5,000 to 10,000 barrels per day reportedly operate intermittently, with some shutting down for months when crude oil supply dries up.
Refiners say this has discouraged financiers and slowed the development of new projects.
Import dependence persists despite rising local output
Regulatory data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) confirms that imports remained dominant throughout 2025.
The authority’s downstream factsheet shows that imported petrol accounted for nearly two-thirds of national consumption, underscoring the scale of Nigeria’s dependence on foreign supply.
This trend persisted even as domestic output increased in the latter part of the year.
In November 2025, petrol imports averaged about 52 million litres per day, before falling to roughly 42 million litres daily in December.
Over the same period, supply from the Dangote refinery rose sharply, supported by improved evacuation and pricing strategies.
Industry observers note that this shift coincided with aggressive pricing moves by the Dangote refinery, which cut gantry prices to discourage imports and stabilise retail pump prices during the festive season.
The strategy helped narrow the price gap between imported fuel and locally refined products, altering market dynamics.
Refiners seek policy alignment and funding support
While domestic refiners move to cut petrol imports, operators stress that sustained progress will require deliberate policy coordination and financial support from the government.
CORAN has renewed calls for the establishment of a refinery infrastructure development fund, similar to existing incentives in the gas sector.
Refiners argue that access to long-term, low-cost financing would enable operators to expand capacity, complete stalled projects, and invest in logistics infrastructure.
Currently, most refinery projects rely on private funding, with limited participation from local banks due to perceived risks around crude supply and pricing.
The association also urged regulators to improve data accuracy in tracking domestic production.
Refiners argue that relying solely on truck-out volumes understates actual output, as significant quantities of refined products remain in storage or are scheduled for bulk distribution.
They proposed the engagement of independent surveyors to conduct routine stock assessments at refineries, with verified data integrated into the national petroleum database.
Such measures, they said, would provide a clearer picture of domestic supply capacity and inform policy decisions.
Dangote refinery ramps up operations
Sources at the Dangote refinery confirmed that the facility has intensified production and evacuation operations, including the introduction of night-time loading, to sustain daily output exceeding 50 million litres of petrol.
The refinery is also supplying diesel, aviation fuel, and other refined products to both local and export markets.
Management has repeatedly stated that the refinery is capable of meeting Nigeria’s petrol demand while exporting surplus volumes, provided market conditions remain fair.
The company has criticised the continued issuance of import licences, arguing that subsidised imports undermine local refining and distort competition.
In December, Dangote announced significant price reductions aimed at keeping pump prices below N740 per litre nationwide.
While marketers complained of losses, the company disclosed that it absorbed substantial costs to stabilise the market, insisting that local refining must be protected to ensure energy security.
Outlook for 2026
As domestic refiners move to cut petrol imports, analysts believe 2026 could mark a decisive shift in Nigeria’s downstream petroleum sector.
With improved crude supply arrangements, supportive financing, and transparent regulation, local refineries could supply the bulk of national demand, reducing pressure on foreign exchange and improving fuel availability.
However, stakeholders warn that without structural reforms, Nigeria risks repeating past cycles of import dependence.
The coming months will test whether policy actions align with the country’s refining ambitions or whether entrenched interests continue to slow the transition
