Nigeria's diesel market is experiencing a significant shift as three modular refineries ramp up production, supplying a combined 648,000 litres of Automotive Gas Oil (AGO) daily. These facilities are emerging as new competitors to larger refining players, including Dangote Refinery, according to performance data released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and reviewed by Petroleumprice.ng.
Edo Refinery Leads in Efficiency
Among the three active modular refineries, Edo Refinery posted the highest capacity utilisation rate at 91.66% during May 2026. The refinery produced an average of 80,000 litres of diesel daily, with all of its output supplied to the domestic market. Its ability to channel entire production locally positioned it as the most efficiently utilised modular refinery in Nigeria during the review period.
Aradel Refinery Tops Production Volumes
While Edo Refinery led in efficiency, Aradel Refinery emerged as the biggest producer. The facility operated at 62.94% capacity utilisation and produced approximately 341,000 litres of diesel per day. Out of this volume, 326,000 litres were sold within Nigeria, making Aradel the single largest contributor to local diesel supply among modular refineries. Its strong output underscores the growing role of smaller refining facilities in bridging domestic fuel supply gaps.
Waltersmith Maintains Steady Operations
Waltersmith Refinery also recorded a strong performance in May, operating at 65.31% capacity utilisation and producing about 296,000 litres of diesel daily. Of this amount, 242,000 litres were supplied to the Nigerian market, reinforcing its role as one of the country's most reliable modular refining operators.
Shutdowns Expose Sector Challenges
Despite the encouraging performance of the three operating plants, the sector continues to grapple with challenges. Both OPAC Refinery and Duport Refinery remained shut throughout May, highlighting lingering operational and structural issues affecting parts of Nigeria's modular refining industry. Nevertheless, the combined daily supply of 648,000 litres from Edo, Aradel, and Waltersmith signals the growing influence of modular refineries in the downstream market.
Competition Intensifies
As competition intensifies and Nigeria seeks to reduce dependence on imported petroleum products, these smaller refineries are increasingly positioning themselves as credible alternatives and complementary players to larger operators such as Dangote Refinery. The modular refineries' steady output demonstrates potential to reduce reliance on imports, even as some facilities face shutdowns.
In a related development, Dangote Refinery recently reduced its diesel gantry price by N100, bringing the new price to N1,500 per litre amid competitive pressures in the Nigerian market. This adjustment reflects fluctuations in global crude oil prices and presents an opportunity for manufacturers and transport companies to alleviate rising operational costs. As the battle for market dominance intensifies, consumers may benefit, but ongoing volatility in crude oil prices keeps the outcome uncertain.
