By Boluwatife Oshadiya | May 28, 2026
Key Points
- Dangote Refinery now meets nearly 80% of Nigeria’s domestic petrol demand, according to the EIU
- EIU says reduced fuel imports are strengthening Nigeria’s foreign exchange position and GDP outlook
- Analysts warn that continued fuel import approvals could undermine domestic refining investments
Main Story
The operational expansion of the 650,000 barrels-per-day Dangote Petroleum Refinery is significantly reducing Nigeria’s dependence on imported petroleum products and improving the country’s foreign exchange outlook, according to the Economist Intelligence Unit (EIU).
In its latest assessment of Nigeria’s downstream oil sector, the London-based research arm of The Economist Group said the refinery has transformed a market that was historically dependent on imported fuel despite Nigeria being Africa’s largest crude oil producer.
The EIU stated that the refinery met nearly 80 per cent of Nigeria’s petrol demand in April as production levels continued to rise toward full operational capacity.
“The gradual ramp up of the 650,000 barrel/day Dangote refinery since May 2023 has transformed Nigeria’s long dysfunctional downstream sector,” the report stated.
Nigeria had for decades relied heavily on imported refined petroleum products due to the poor performance of state-owned refineries in Port Harcourt, Warri, and Kaduna, even while producing about 1.5 million barrels of crude oil daily.
According to the report, rising local refining capacity is helping to reduce pressure on foreign reserves, improve domestic fuel supply, and support Nigeria’s balance of payments through lower import bills and increased exports of refined products.
The EIU also projected that the refinery’s full operational capacity and future expansion plans would support Nigeria’s economic growth and foreign exchange earnings over the medium term.
The refinery has already begun exporting refined petroleum products to several African markets, positioning Nigeria as an emerging regional refining hub amid growing energy demand across the continent.
The Issues
The refinery’s expansion comes at a critical period for Nigeria’s downstream petroleum sector following the removal of fuel subsidies and the introduction of market-based pricing reforms.
Analysts say the shift toward domestic refining could reduce Nigeria’s vulnerability to foreign exchange volatility and global supply disruptions that have historically triggered fuel scarcity and price spikes.
However, tensions have emerged over continued petrol import approvals by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), despite growing domestic refining capacity.
Dangote Industries has challenged the policy in court, arguing that unrestricted imports contradict the objectives of the Petroleum Industry Act, which seeks to encourage local refining and reduce dependence on imported fuel.
Industry experts also warn that continued importation could discourage future investments in refining infrastructure and weaken Nigeria’s broader industrialisation agenda.
What’s Being Said
“Meanwhile, the attainment of full capacity at, and an increase in exports from, the Dangote refinery will support real GDP growth and foreign exchange earnings in 2026 and 2027 and beyond,” the EIU said in its report.
“Continued dependence on imported fuel has historically contributed to pressure on foreign reserves, exchange rate instability and fiscal leakages,” said Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE).
Analysts at S&P Global Ratings also recently cited rising domestic refining capacity and increased hydrocarbon exports as factors supporting Nigeria’s sovereign credit rating upgrade — the country’s first ratings upgrade in 14 years.
What’s Next
- Dangote Refinery is expected to continue ramping up production toward full operational capacity in the coming months
- Court proceedings over fuel import approvals and refinery protection policies are likely to shape future downstream regulations
- Industry stakeholders expect Nigeria’s fuel import bill to decline further as local refining output rises and export volumes increase
The Bottom Line: Dangote Refinery is rapidly reshaping Nigeria’s energy landscape by reducing dependence on imported fuel and strengthening foreign exchange stability. The bigger policy challenge now is whether regulators will fully align Nigeria’s downstream framework with the country’s new domestic refining reality.
