KEY POINTS
• Lagos State Government says domestic refining should be linked with ports, industrial zones, transport infrastructure and markets to drive wider economic activity.
• Dangote Industries says competitive domestic refining can create jobs, generate taxes, retain foreign exchange and build industrial capabilities.
• Stakeholders warn that inadequate pipelines, storage, ports and distribution systems could limit the gains from increased domestic refining.
MAIN STORY
The expansion of Nigeria’s refining capacity should be used as a springboard for broader industrial development rather than being limited to meeting the country’s petroleum needs, the Lagos State Government and Dangote Industries Ltd. have said.
The position emerged at the third Nigeria Oil Refining Summit (NORS) 2026 in Lagos, where industry stakeholders examined ways of connecting crude supply with growing demand for refined petroleum products.
Representing Gov. Babajide Sanwo-Olu, the Commissioner for Energy and Mineral Resources, Mr Biodun Ogunleye, said Lagos was seeking to use its concentration of major infrastructure to create stronger connections between refining and other areas of the economy.
He cited the Lekki Deep Seaport, Lekki Free Trade Zone and Dangote Refinery as facilities whose combined impact could extend into manufacturing, supply chains, employment and new business opportunities.
Sanwo-Olu said the state therefore viewed refining as part of a wider economic system rather than an activity that ends when crude is converted into petroleum products.
“The objective should not simply be to refine more crude. It should be to build an ecosystem in which domestic refining strengthens manufacturing, supports businesses, creates jobs and makes our economy more productive,” he said.
For Dangote Industries, the economic case for refining also goes beyond replacing imported petroleum products.
The company’s President, Alhaji Aliko Dangote, represented at the summit by Group Chief Economist Dr Hassan Mahmud, said keeping more crude processing within Nigeria could allow the country to capture additional economic value that would otherwise be generated elsewhere.
He linked domestic processing to employment, government revenue, foreign exchange earnings and the development of capabilities that could support other businesses.
“Every barrel of crude that we process competitively in Nigeria rather than exporting unprocessed creates additional value, jobs, taxes, foreign exchange earnings, industrial capabilities and opportunities for supporting other businesses,” he said.
But the ability to translate refining capacity into wider economic gains depends partly on what happens after crude reaches the refinery, with logistics emerging as a key concern at the summit.
Dangote said Nigeria needed stronger systems for transporting crude and distributing finished petroleum products, particularly as refining volumes increase.
He identified pipelines, storage terminals, ports and distribution networks as essential components of the sector, warning that heavy reliance on road haulage for petroleum products adds cost and puts pressure on existing infrastructure.
“Moving millions of litres of petroleum product predominantly by road is costly, inefficient and damaging to our infrastructure,” Dangote said.
He also urged Nigeria to build refining capacity that can support exports, particularly into African markets, rather than designing the industry solely around domestic consumption.
According to him, a functioning refining industry would involve a range of facilities, from large plants to medium-sized, modular and specialised refineries.
“One refinery cannot create an industry,” he said.
THE ISSUES
- Domestic refining is being positioned as a driver of wider industrial activity, with potential links to manufacturing, employment, supply chains and business growth.
- Infrastructure gaps involving pipelines, storage terminals, ports and distribution systems could constrain the benefits of increased refining capacity and raise the cost of moving petroleum products.
- Developing a competitive refining industry would require multiple types of efficient refineries as well as infrastructure and export capacity to serve domestic and regional markets.
WHAT’S BEING SAID
“The objective should not simply be to refine more crude. It should be to build an ecosystem in which domestic refining strengthens manufacturing, supports businesses, creates jobs and makes our economy more productive.” — Babajide Sanwo-Olu, Lagos State Governor
“Every barrel of crude that we process competitively in Nigeria rather than exporting unprocessed creates additional value, jobs, taxes, foreign exchange earnings, industrial capabilities and opportunities for supporting other businesses.” — Aliko Dangote, President, Dangote Industries Ltd.
“Moving millions of litres of petroleum product predominantly by road is costly, inefficient and damaging to our infrastructure.” — Aliko Dangote, President, Dangote Industries Ltd.
“One refinery cannot create an industry.” — Aliko Dangote, President, Dangote Industries Ltd.
WHAT’S NEXT
The focus is expected to be on strengthening the infrastructure needed to connect domestic refineries with crude supply, manufacturers, consumers and export markets.
This includes improving the systems for transporting crude and refined products, expanding storage and distribution infrastructure, and developing different categories of refining capacity.
BOTTOM LINE
The Lagos State Government and Dangote Industries want domestic refining to serve as a foundation for broader industrialisation, with manufacturing, jobs, logistics and exports forming part of the value chain. Infrastructure for moving and storing crude and refined products remains central to achieving that wider economic impact.
