Faith Nyasuguta
The Dangote Refinery is rapidly transforming Nigeria’s petrol market, with new reports suggesting it could soon dominate the country’s fuel supply. Once entirely dependent on foreign imports for its premium motor spirit (PMS) needs, Nigeria now sources around 60% of its domestic petrol from the Dangote Refinery, according to S&P Global.
Commissioned in May 2023, the $19 billion Dangote Refinery, located in Lagos’ Lekki Free Trade Zone, is Africa’s largest oil refinery and one of the biggest single-train refineries globally, with a full capacity of 650,000 barrels per day.
Though it has yet to reach full capacity, the refinery is currently operating at over 85% utilization, producing more than 30 million liters of petrol daily. This equates to about 200,000 barrels per day, covering the majority of Nigeria’s estimated daily demand of 350,000 barrels.
The refinery’s impact on Nigeria’s fuel landscape has been immediate. Before its launch, Nigeria, despite being Africa’s largest crude oil producer, imported nearly all its refined petroleum products due to underperforming state-owned refineries. But with the Dangote Refinery now operational, gasoline imports have sharply declined.
However, there’s some disagreement over the refinery’s exact market share. While S&P Global reports that Dangote supplies 60% of the country’s petrol needs, Nigeria’s Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) counters this figure, stating that all three operational refineries, including Dangote, currently supply less than 50% of national consumption.
State-owned refineries in Port Harcourt and Warri have largely been offline or under repair, limiting their contribution. Despite earlier reports that these refineries had resumed operations, the Nigerian National Petroleum Corporation (NNPC) confirmed that Port Harcourt remains inactive and Warri is still undergoing repairs as of early February.
Aliko Dangote, Africa’s richest man and CEO of the Dangote Group, remains optimistic. He recently announced that the refinery could hit full capacity within the next 30 days, potentially making Nigeria self-sufficient in petrol production and reducing its reliance on costly imports.
While concerns about market monopoly linger, supporters argue that the refinery’s success could stabilize fuel prices, improve energy security, and boost the Nigerian economy. However, regulators and industry experts stress the need for healthy competition to prevent market dominance and ensure fair pricing for consumers.
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