A 2026 report by the Economist Intelligence Unit (EIU), has revealed that Dangote Refinery & Petrochemicals have significantly reduced Nigeria’s dependence on fuel import.
The report also showed that the refinery, with its operational ramp up of the 650,000 barrels per day, is fundamentally reshaping the country’s downstream oil sector, and strengthening its external position.
EIU is the research and analysis division of The Economist Group, London.
The EIU Report On Dangote Refinery
In its latest assessment on Nigeria’s fuel market and regulatory environment, it stated that the refinery has already transformed a sector that was previously characterised by heavy reliance on imported fuel, despite Nigeria being Africa’s largest crude oil producer.
The report noted that the refinery met nearly 80 per cent of domestic petrol demand in April and produced enough volumes to satisfy local consumption requirements, as operations approached full capacity.
The EIU described Nigeria’s downstream petroleum sector before the refinery as “long dysfunctional,” noting that the country had remained almost entirely dependent on costly imported fuel while producing nearly 1.5 million barrels of crude oil daily.
According to the report, the emergence of Dangote Refinery has reduced import dependence, improved domestic fuel availability, and strengthened Nigeria’s balance of payments position through lower import demand and rising exports of refined petroleum products.
“The gradual ramp up of the 650,000 barrel/day by Dangote Refinery since May 2023 has transformed Nigeria’s long dysfunctional downstream sector,” it was stated in the report.
“The country’s main refineries, all state owned, had been inoperative for years and Nigeria was almost entirely reliant on costly imported fuel,” it was added.
It was added that the refinery’s attainment of full operational capacity and its planned expansion would further support Nigeria’s economic growth and foreign exchange earnings over the medium term.
“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, as a planned doubling of the plant’s output comes on stream around the end of the decade,” it added.
Industry analysts were of the opinion that the refinery was increasingly positioning Nigeria as an emerging refining and export hub, altering energy trade flows across Africa, and reducing the vulnerability associated with fuel import dependence.
They noted that the refinery’s expansion has coincided with major reforms in Nigeria’s downstream sector, including the removal of fuel subsidies and the introduction of market-driven pricing mechanisms.
It was, however, acknowledged that the transition from a state-dominated fuel import structure to large-scale domestic refining has triggered resistance from interests linked to the old import regime.
The latest tensions emerged following the decision by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to relax restrictions on petrol imports, despite the refinery’s growing capacity to meet domestic demand.
Dangote Group subsequently initiated legal action, arguing that continued import approvals would undermine domestic refining investments and conflict with the objectives of the Petroleum Industry Act (PIA), which sought to encourage local refining capacity and reduce import dependence.
Analysts noted that the availability of large-scale domestic refining capacity has improved Nigeria’s energy security and reduced exposure to external supply shocks and foreign exchange volatility.
The Centre for the Promotion of Private Enterprise (CPPE) also cautioned against unrestrained importation of petroleum products, warning that such a policy could weaken Nigeria’s industrialisation drive and discourage investments in domestic refining.
Chief Executive Officer of CPPE, Muda Yusuf, said continued dependence on imported fuel had historically contributed to pressure on foreign reserves, exchange rate instability and fiscal leakages.
The growing impact of Dangote Refinery was also being reflected in Nigeria’s broader macroeconomic indicators.
Earlier in May, S&P Global Ratings cited increased domestic refining capacity and rising hydrocarbon exports among the major factors supporting Nigeria’s sovereign credit rating upgrade – the first in 14 years.
Beyond Nigeria, analysts opined that the refinery was increasingly being viewed as a strategic industrial asset for Africa, where many countries remain heavily dependent on imported fuel despite rising demand for transportation, manufacturing, and power generation.
