Over the years, Nigeria, Africa’s top oil producer, lived a paradox: exporting millions of barrels of crude oil daily while importing nearly all its refined fuel at inflated global prices. Long queues, subsidy wars, and the volatile dance of forex and fuel shortages became recurring headlines. In 2025, the 650,000-barrel-per-day Dangote Petroleum Refinery, Africa’s largest and the world’s biggest single-train facility, is reshaping Nigeria’s oil economy. According to the Dangote Group, the refinery now produces 45 million litres of petrol and 25 million litres of diesel daily, exceeding local demand. The country that once imported nearly all its refined products now exports a surplus.
A new 15% import duty on refined fuel has further boosted domestic refining, marking a decisive policy shift toward self-sufficiency and regional trade leadership. Nigeria’s four state-owned refineries, with a combined capacity of 445,000 barrels per day, have long been idle despite costly rehabilitation efforts. Smaller modular refineries added another 90,000 barrels per day but barely dented the daily consumption of over 30 million litres.
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Dangote’s $20 billion facility, sprawling across 2,635 hectares in Lagos’ Lekki Free Zone, was built to process local crude, stabilise prices, and end decades of costly imports. Within a year of its 2024 launch, it achieved what successive governments could not: fuel self-sufficiency.
Producing 70 million litres of refined fuel daily, the refinery now outpaces national demand, creating an export surplus that could earn Nigeria billions in foreign exchange. Petrol prices, which soared above ₦1,000 per litre after subsidy removal, have stabilised around ₦841–₦851, a 20% drop attributed to local refining.
This shift could save Nigeria $10–$15 billion annually in import costs and strengthen the naira by reducing forex outflows. Relying on local crude also guarantees a steady market for Nigerian producers.
Over 500 direct jobs and tens of thousands of indirect ones have been created across logistics, construction, and supply chains. Beyond employment, the refinery enhances energy security, cushions the economy from global oil shocks, and improves the trade balance.
In October 2025, President Bola Tinubu approved a 15% import duty on refined fuel, following a Federal Inland Revenue Service (FIRS) recommendation. The goal: protect local refiners from cheap, often substandard imports.
Dangote Group spokesperson Anthony Chiejina called the policy “patriotic,” saying it safeguards billions in local investment. Critics, including independent importers, warn it could stifle competition. “If not properly managed, it could edge out importers and create a monopoly,” said Billy Harry, president of the Petroleum Products Retail Outlets Owners Association of Nigeria.
The government insists the measure is temporary—intended to stabilise local refining—but history shows such protection can entrench dominance if unchecked. Still, the policy underscores Nigeria’s new identity: a refining nation, not just a crude exporter.
Nigeria’s refining ambitions date back to the 1960s. By the 1990s, corruption, poor maintenance, and sabotage had crippled the sector, making the continent’s largest oil producer dependent on imports for over 90% of its fuel. Decades of costly “turnaround maintenance” produced little progress.
Dangote’s refinery marks a definitive break. Its 435 MW power plant, 1,100 km pipeline network, and 4.7 billion litres of storage capacity make it a fully integrated complex, the largest of its kind worldwide.
By 2028, the plant is projected to expand to 1.4 million barrels per day, overtaking India’s Reliance Jamnagar Refinery. This scale could make Nigeria Africa’s refining hub, supplying markets across West, Central, and East Africa, where many countries still rely on imports.
Africa currently refines only 30% of its crude domestically, losing up to $25 billion annually to imports. Dangote’s operations could flip that equation, advancing the African Continental Free Trade Area (AfCFTA) goal of regional energy integration.
Despite its success, the refinery faces structural hurdles. Securing sufficient local crude remains a challenge, as Nigeria’s “willing seller, willing buyer” policy often prioritises exports. This has at times forced Dangote to import crude from abroad—a costly irony for Africa’s leading oil producer.
Regulatory uncertainty adds pressure, with growing calls to amend the Petroleum Industry Act (PIA) to ensure fair pricing and supply allocation. Operational risks such as maintenance shutdowns and sabotage attempts also underscore the need for strong oversight.
Critics caution that without transparent regulation, protectionist policies could crowd out smaller refineries and stifle innovation. Nigeria must therefore balance support for industrial growth with fair competition and clear governance.
Regionally, the shift to renewables and fluctuating oil prices may test long-term profitability, yet Africa’s growing population and industrialisation suggest robust fuel demand for decades.
Dangote’s next phase includes a new 750,000-barrel-per-day processing line, doubling capacity by 2028. The refinery’s petrochemical expansion aims to boost polypropylene output from 900,000 to 2.4 million tonnes annually, alongside new base oil and linear alkyl benzene units, key feedstocks for local manufacturing.
To democratise ownership, Dangote plans to list 10–30% of refinery shares on the Nigerian Exchange by 2026, inviting citizens and institutions to invest in one of Africa’s most profitable ventures.
Its growing export reach, including contracts to supply jet fuel and diesel to Europe, the U.S., and Brazil, cements Nigeria’s reentry into the global refined fuels market. The refinery could also anchor an industrial corridor in Lekki, spurring petrochemical, plastics, and logistics industries, a cluster reminiscent of Asia’s refining hubs.
Nearly 70 years after Nigeria’s first oil discovery in Oloibiri, the Dangote Refinery signals a new kind of independence, that African economies can build and sustain world-class energy infrastructure.
