Nigeria Achieves Major Reduction in Fuel Imports as Domestic Refining Soars
Nigeria has recorded a substantial decline in fuel imports over recent months, marking significant progress in the nation's push toward energy independence. This development comes as domestic refining output experiences a sharp increase, driven primarily by the operational expansion of the Dangote Petroleum Refinery.
Domestic Production Claims Larger Market Share
According to data released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) in its January fact sheet, the total daily supply of Premium Motor Spirit (PMS), commonly known as petrol, decreased to 64.9 million litres in January. This represents a notable drop from the 74.2 million litres recorded in December 2025.
Despite this overall reduction in supply, local refining accounted for the majority of the volume. The regulator reported that domestic production contributed 40.1 million litres per day, representing 57.5% of total supply. This marks a dramatic rise from 17.1 million litres per day in October 2025, reflecting a 57% increase in refining capacity over just three months.
Meanwhile, imports by oil marketers and the Nigerian National Petroleum Company Limited (NNPCL) dropped to 25.8 million litres daily in January, highlighting Nigeria's reduced reliance on foreign fuel supply.
Dangote Refinery Drives Output Growth
The NMDPRA attributed the growth in local supply to improved output from the Dangote Petroleum Refinery, noting that domestic PMS supply rose from 32 million litres per day in December to 40.1 million litres in January. The Dangote refinery accounted for most of this increase, raising its production by approximately 25% month-on-month.
However, output remains below the facility's domestic target of 75 million litres per day. The refinery operated at an average capacity utilisation rate of 61.27%, with a peak of 67.69%, indicating ongoing efforts to scale up operations.
On February 11, 2026, the refinery announced it had reached its full nameplate capacity of 650,000 barrels per day. Billionaire investor Femi Otedola described this milestone as transformative for Nigeria's energy sector, expressing optimism that sustained local refining could reduce pressure on foreign exchange, strengthen the naira, and improve investor confidence.
State-Owned Refineries Remain Inactive
The report revealed that Nigeria's state-owned refineries have yet to resume meaningful operations. The Port Harcourt refinery is currently shut down, although diesel evacuation from previously produced stock averaged 0.376 million litres per day. The Warri and Kaduna refineries also remain non-operational.
Meanwhile, the domestic supply of Automotive Gas Oil (diesel) averaged 10.9 million litres per day, suggesting gradual gains in broader refining output beyond just petrol production.
Economic Implications and Future Outlook
Analysts say the increase in local refining comes at a crucial time for Nigeria's economy. Fuel imports have historically consumed billions of dollars in foreign exchange and contributed to inflationary pressures, particularly amid subsidy reforms.
With domestic PMS now accounting for 57% of supply, experts believe this development could:
- Ease demand for foreign currency
- Potentially position Nigeria as a net exporter of refined products
- Offer some relief to consumers through stabilized retail fuel prices
However, analysts caution that sustaining these gains will depend on several critical factors:
- Steady crude supply to refineries
- Infrastructure improvements across the energy sector
- Rehabilitation of public refineries
- Policy consistency under President Bola Tinubu's administration
Industry stakeholders are now monitoring subsequent monthly data to assess whether the upward trend in domestic refining will continue. The Dangote Refinery recently reduced its gantry petrol price for marketers by N27 per litre to N772.50, a move expected to encourage marketers to lift more fuel and help the refinery maintain competitive pricing while boosting throughput.
