Nigeria's Refining Revolution: Local Plants Poised to Slash Petrol Imports by 2026
Nigeria's energy landscape is witnessing a significant transformation as domestic refineries, led by the massive Dangote Petroleum Refinery and supported by modular plants across the country, prepare to dramatically reduce petrol imports by 2026. This shift represents a fundamental reset of the nation's downstream oil sector, promising greater energy security while creating challenges for traditional fuel importers.
Current Import Dominance and Domestic Potential
Despite the gradual operational ramp-up of the 650,000 barrels-per-day Dangote refinery, imported petrol still dominated Nigeria's fuel supply in 2025. According to NMDPRA data, oil marketing companies imported 11.85 billion litres of the total national consumption of 18.97 billion litres, accounting for 62.47 percent of supply. Domestic refineries supplied approximately 7.54 billion litres, representing 37.53 percent of the market.
Industry experts maintain that Nigeria already possesses sufficient installed refining capacity to meet domestic petrol demand completely. The Crude Oil Refiners Association of Nigeria (CORAN) asserts that local plants, with Dangote at the forefront, could fully supply Nigeria's petrol needs if persistent challenges around crude oil feedstock availability and regulatory processes are effectively resolved.
The Critical Challenge: Crude Supply Bottlenecks
CORAN's Publicity Secretary, Eche Idoko, emphasizes that refinery underperformance stems primarily from unreliable crude oil supply rather than technical limitations. While the Dangote refinery currently produces around 50 million litres of petrol daily, many modular refineries operate at less than 10 percent of their installed capacity, with some plants shutting down intermittently due to prolonged feedstock shortages.
"Installed capacity is not the issue. Feedstock availability has always been the challenge," Idoko stated, noting that several operators are forced to source crude externally or scale back production because of inconsistent supply arrangements.
This uncertainty over crude access has discouraged investment in new refinery projects, as financial institutions now demand long-term supply guarantees before committing financing to such ventures.
Early Signs of Market Transformation
Industry data reveals that the shift toward local production dominance is already underway. Imported petrol volumes decreased from 52.1 million litres per day in November to 42.2 million litres per day in December. During this same period, Dangote refinery's daily supply increased substantially from 19.5 million litres to 32 million litres.
The refinery has since commenced night-time loading operations, with nationwide deliveries now exceeding 50 million litres daily. Given that Nigeria's peak petrol demand is estimated at 54 million litres per day, there remains minimal room for imports if local production achieves full optimization.
2026: Projected Turning Point for Fuel Imports
CORAN projects that domestically refined petroleum products could surpass imports in 2026 if the government implements several critical measures:
- Improving crude allocation to local refineries
- Supporting financing mechanisms for operators
- Adopting more accurate production tracking beyond truck-out figures
For Nigeria, this transition promises multiple benefits including reduced foreign exchange pressure, enhanced energy security, and more stable fuel supply chains. However, for fuel importers, the coming year may mark the beginning of shrinking profit margins and declining market relevance in an industry increasingly dominated by local refining capacity.
Market Adjustments and Price Reductions
As competition intensifies in Nigeria's downstream petroleum sector, petrol prices are decreasing across the country. Recent findings indicate that petroleum product importers and depot operators have reduced wholesale prices, with Premium Motor Spirit (PMS) now selling at an average of approximately ₦702 per litre at depots in Lagos and other major cities.
Similar price reductions have been recorded in Calabar and other coastal supply corridors, reflecting a broad market reset rather than isolated adjustments. This development offers fresh relief to marketers and raises expectations of lower prices at fuel stations in the weeks ahead.
The evolving dynamics between local production and imports will continue to shape Nigeria's energy sector through 2026, with significant implications for the national economy, energy security, and market participants across the value chain.
