Nigeria’s dependence on imported fuel is ending as the 650,000 barrels per day Dangote Petroleum Refinery ramps up operations, the Economist Intelligence Unit (EIU) has said.
The refinery is reshaping the downstream oil sector, easing foreign exchange pressure, and strengthening the country’s external position.
In its latest assessment of Nigeria’s fuel market, the EIU said the plant met nearly 80% of domestic petrol demand in April and is producing enough to satisfy local consumption as it nears full capacity.
Before operations began in May 2023, Nigeria remained “almost entirely reliant on costly imported fuel” despite producing about 1.5 million barrels of crude daily, the report noted.
The EIU described Nigeria’s downstream sector as long dysfunctional, with state-owned refineries inoperative for years.
The Dangote Refinery has reduced import dependence, improved fuel availability, and improved the balance of payments through lower import demand and rising exports of refined products.
Full operational capacity and planned expansion will further support real GDP growth and foreign exchange earnings in 2026, 2027 and beyond, the EIU added.
A planned doubling of output is expected by the end of the decade.
The refinery’s rise coincides with major reforms, including subsidy removal and market-driven pricing.
But the shift from state-dominated imports to large-scale domestic refining has sparked pushback from interests tied to the old import regime.
Tensions rose after the Nigerian Midstream and Downstream Petroleum Regulatory Authority relaxed petrol import restrictions despite growing local supply.
Dangote Industries has filed legal action, arguing that continued import approvals undermine domestic refining and conflict with the Petroleum Industry Act.
Analysts say large-scale domestic refining has improved energy security and reduced exposure to external supply shocks.
The Centre for the Promotion of Private Enterprise (CPPE) warned that unrestrained imports could weaken industrialisation and discourage refining investment.
CPPE CEO Muda Yusuf said import dependence historically fueled pressure on reserves, exchange-rate instability, and fiscal leakages.
The refinery’s impact is showing in broader indicators. S&P Global Ratings this month cited increased domestic refining and rising hydrocarbon exports as key reasons for upgrading Nigeria’s sovereign credit rating — its first in 14 years.
Beyond Nigeria, the plant is emerging as a strategic industrial asset for Africa, where many countries still rely on imported fuel amid growing demand for transport, manufacturing, and power. Industry analysts say the refinery is positioning Nigeria as a regional refining and export hub, altering energy trade flows across the continent.
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