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Dangote Refinery Can Save Nigeria N15tn Import Cost, Generate $11bn FX Inflow Annually – Dele Oye
The Dangote Petroleum Refinery has the capacity to save Nigeria over N15 trillion in fuel import costs and generate an estimated $11 billion in foreign exchange inflows through local refining and petroleum exports per annum.
These are the views of former President of the Nigerian Association of Chambers of Commerce of Industry, Mines and Agriculture (NACCIMA), Dele Oye, who is also the Chairman of the Alliance for Economic Research and Ethics LTD/GTE, expressed in a media statement.
He emphasised that Nigeria continues to incur massive foreign exchange losses due to its dependence on imported refined petroleum products, despite the operational capacity of the Dangote Petroleum Refinery.
The former Chairman of the Organised Private Sector of Nigeria (OPSN) noted that the continued defence of the Nigerian National Petroleum Company Limited (NNPC Ltd) of fuel import licences undermines Nigeria’s drive toward energy self-sufficiency and economic sovereignty.
Oye explained that Nigeria spent approximately N15.42 trillion on petrol imports in 2024, describing the figure as a significant drain on foreign exchange reserves and a structural weakness in the country’s energy architecture.
According to him, the Dangote Refinery has the ability to meet over 90 per cent of Nigeria’s domestic fuel demand and could significantly reduce import dependence if fully integrated into the national supply system.
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Oye further estimated that increased reliance on local refining could save Nigeria up to $11 billion annually in foreign exchange outflows, reducing pressure on the naira and improving macroeconomic stability.
He argued that NNPC’s justification for continued fuel importation on the grounds of maintaining competition is flawed, insisting that it effectively entrenches dependency on foreign refineries while discouraging domestic industrial growth.
“NNPC’s insistence on maintaining import licences for foreign-sourced products while a domestic facility can meet demand is tantamount to penalising the player who built the stadium while rewarding those who merely show up to play,” Oye said.
He maintained that Nigeria’s legal framework, including the Petroleum Industry Act (PIA) 2021 and the Nigerian Oil and Gas Industry Content Development Act, prioritises domestic refining and local value addition, adding that imports are intended only as a short-term measure where local capacity is insufficient.
Besides, Oye questioned the consistency of NNPC’s position, noting that while the company raises concern about monopoly risks from a private refinery, it continues to rely heavily on foreign supply chains for domestic fuel consumption.
He added that sustained fuel importation exposes Nigeria to global price volatility, foreign exchange pressure, and job losses in the domestic economy, while exporting value-added opportunities to foreign refiners and logistics operators.
He further called for a review of import licensing under the PIA, stronger protection for domestic refineries, and fiscal incentives to encourage additional private sector investment in refining infrastructure.
Oye also urged greater transparency in refinery rehabilitation projects and called for accountability in past turnaround maintenance expenditures, arguing that inefficiencies in state-owned refineries have contributed to prolonged import dependence.
He also referenced global models from countries such as Brazil, Saudi Arabia, India and the United States, where domestic refining capacity is protected and supported through targeted industrial policies. According to him, Nigeria risks undermining its industrialisation agenda if it fails to prioritise local refining capacity over import dependence, despite existing domestic production capability.
“The Nigerian National Petroleum Company Limited (NNPC Ltd) has, in recent court filings, accused Dangote Petroleum Refinery, a $20 billion, 650,000 barrels-per-day facility, Africa’s largest single-train refinery, of seeking to monopolise Nigeria’s fuel market. The state oil company’s argument: that restricting fuel import permits would ‘undermine competition and expose Nigeria to supply disruptions, price instability and threats to national energy security’.
“This position, articulated with the gravitas of institutional authority, conceals a devastating truth: NNPC is not defending competition. It is defending importation. It is not protecting energy security. It is perpetuating dependency. And in doing so, it stands in direct contravention of Nigeria’s own laws, the President’s economic agenda, and the hard-won lessons of nations that have successfully industrialized their petroleum sectors.”
“The Dangote Petroleum Refinery represents what is possible when Nigerian capital, vision, and perseverance confront adversity. Built at a cost of approximately $20 billion, the facility processes 650,000 barrels of crude per day, produces up to 53.6 million litres of Premium Motor Spirit (PMS) and 23.6 million litres of Automotive Gas Oil (AGO) daily, has the capacity to meet over 90 per cent of Nigeria’s domestic demand, can save Nigeria between $6–11 billion annually in foreign exchange outflows and is currently exporting jet fuel to European markets, demonstrating global competitiveness.
“It has the capacity to meet 100 per cent of Nigeria’s requirement for all refined liquid products, including petrol, diesel, kerosene and aviation fuel, with surplus volumes available for export, currently exports petrol, diesel and jet fuel across global markets, including Africa, Asia, the Americas and Europe, demonstrating strong international competitiveness,” Oye argued.
He maintained that the NNPC’s litigation against Dangote Refinery using the language of ‘monopoly’ to defend importation is not merely a policy error, but a moral failure.
“It betrays the Nigerian entrepreneur who builds despite crushing interest rates. It betrays the Nigerian worker who could be employed in domestic refining. It betrays the Nigerian taxpayer whose resources are diverted to foreign suppliers. And it betrays the Nigerian future that depends on industrial self-sufficiency.
“The laws are clear. The economics are compelling. The global precedents are overwhelming. What is lacking is not knowledge but political will and the courage to prioritise Nigerian industries over foreign suppliers, Nigerian jobs over foreign profits, and Nigerian sovereignty over convenient dependency,” he added.
According to him, President Bola Tinubu’s economic agenda calls for production over consumption, industrialisation over importation, and sovereignty over subservience, stressing that NNPC must align with this agenda or be reformed until it does.
“The Dangote Refinery is not a monopoly threat. It is a sovereignty achievement. It is proof that Nigerians can build world-class industrial infrastructure when given the opportunity. The task of the government is not to stifle this achievement with import competition but to nurture it with protective policies that other nations take for granted.
“Nigeria does not need to import refined petroleum products. Nigeria needs to refine its own petroleum, by its own people, in its own facilities, for its own benefit. Anything less is a continuation of the colonial economic model that has kept Africa resource-rich but development-poor for generations,” he insisted.
Optimism over improved domestic refining output and cheaper petroleum products at the Dangote Petroleum Refinery & Petrochemicals (DPRP) now hang in the balance in the face of a 62 percent crude oil supply shortfall.
The $20 billion, 700,000 barrels per day facility, which began operations in 2021, is facing a severe crude supply shortfall of eight cargoes per month.
To operate at optimal capacity, the refinery requires 13 cargoes (ships) of crude monthly as against five cargoes currently being supplied by the Nigerian National Petroleum Company Limited (NNPC Ltd).
This was detailed in a report by the African Energy Council (AEC), which highlighted that the refinery is currently running at a third of its crude oil requirement.
The report lamented that the refinery running at a shortfall is not because the feedstock does not exist in Nigeria, but because the system supplying it has a vested interest in keeping the import window open.
The AEC added that the decision of the DPRP to file a suit against the Federal Government, NNPC Ltd and downstream regulator is less a legal story and more of a governance issue.
“When your mandated crude supplier competes with you in the same market, a shortfall of eight deliveries per month stops being a logistics problem and starts looking like a structural one,”, the report noted.
It added that the Petroleum Industry Act (PIA) 2021 was supposed to settle this.
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Specifically, the AEC noted that Section 317(9) served as an implicit agreement with private investors to refine locally, meet domestic demand, and operate in a context where import competition is effectively limited.
“That compact is now being tested in a Lagos courtroom and the outcome will say far more about Nigeria’s investment credibility than any roadshow ever could”.
The think-tank group pointed out that the real cost is not felt in Ibeju-Lekki but at the pump, at the CBN’s FX desk and in boardrooms across the continent watching to see whether Nigerian energy law means what it says.
The AEC argues that Dangote’s crude dispute lays bare a governance failure that no court ruling can fully fix.
The body lamented that a state oil company acting as both supplier and competitor to the very refinery built to end Nigeria’s import embarrassment is a conflict of interest hiding in plain sight.
“Until NNPC’s commercial and regulatory roles are cleanly separated, the PIA remains a promise on paper, and Africa’s most ambitious private energy investment stays hostage to institutional self-interest,” it noted.
The drop in crude supply to the Dangote refinery is further supported by latest data released by the Nigerian Midstream Downstream Petroleum Authority (NMDPRA) for the month of May.
The report indicated that crude oil deliveries to Dangote, including other local refineries declined during the review period. Refiners received an average of 578,000 barrels of crude oil per day in May, down from 612,000 barrels per day in April, representing a decrease of 5.6 percent.
Industry observers pointed out that the development suggests that while local refining capacity continues to expand, refiners may still be facing operational and feedstock challenges that require supplementary imports to bridge supply gaps and maintain market stability.
The acquisition of an additional 40 percent interest in ND Western Limited, has seen Aradel Holding grow its total assets by a whopping 466 per cent to N9.9 trillion in the 2025 financial year.
Biztellers reports that the transaction conferred majority shareholding on Aradel, as its equity stake in Renaissance rose to 53.3 percent.
According to the energy company, the transaction, completed on December 31, 2025, also significantly expanded its reserves, production base and operational footprint, leading to a sharp increase in the size of its balance sheet.
Going by its audited results for the year ended December 31, 2025, total assets rose from N1.75 trillion in 2024 to N9.9 trillion, reflecting the consolidation of ND Western’s assets and liabilities and the carrying value of Aradel’s effective interest in Renaissance.
The company also reported a 192 percent increase in profit after tax to N757.3 billion from N259.1 billion in the previous year, while revenue rose by 20 percent to N699.4 billion from N581.2 billion.
In the same vein, operating profit increased by 152 percent to N733.6 billion from N291.4 billion, while earnings from associates rose by 246 per cent to N109.5 billion.
Aradel noted that the operational and income statement figures for 2025 do not include contributions from the newly acquired businesses because the transactions were completed on the last day of the financial year. It said only the balance sheet impact was consolidated as of December 31, 2025, while the full operational and earnings contributions are expected to be reflected from 2026.
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On the results, Chief Executive Officer, Adegbite Falade, said, “2025 was a defining year as we continued to strengthen our position as an integrated energy operating platform. We delivered record revenue and profitability, while executing the most transformational strategic expansion in our history.
Our additional 40 percent investment in ND Western and the resultant increase in our total effective interest in Renaissance (53.3 percent) significantly expanded our reserves, production base and operational footprint, positioning Aradel to operate at materially greater scale from 2026 onwards.”
On operations, crude oil production rose by three per cent to 14.1 thousand barrels per day from 13.8 thousand barrels per day in 2024, while gas production increased by 59 percent to 51.4 million standard cubic feet per day from 32.4 million standard cubic feet per day.
The company recorded crude oil sales of 4.1 million barrels during the year, up 32 per cent from the previous year, while refined product output increased by 18 percent to 313.4 million litres. Refinery utilisation improved to 49 percent from 40 percent in 2024. Gas revenue increased by 72 percent to N48.6 billion, while refined products revenue rose by 18 percent to N210.8 billion. Crude oil exports remained the largest revenue source, contributing N440.1 billion, or 63 percent of total revenue.
The company reported net cash generated from operating activities of N179.7 billion, compared with N311.9 billion in the previous year, while cash and cash equivalents rose to N1.5 trillion at the end of the period from N411.8 billion a year earlier.
Aradel’s board proposed a final dividend of N23 per share, bringing the total dividend for the 2025 financial year to N33 per share, compared with N26.4 per share paid for 2024.
Falade said the company would focus on integrating its expanded asset base, increasing production and diversifying revenue streams. “The consolidation of NDW and Renaissance fundamentally reset the scale of the Company’s balance sheet, giving us the asset and reserve base to underpin our future expansion. Our 2025 audited accounts therefore capture the balance-sheet impact of these acquisitions; their full earnings contribution will be reflected in the Group’s consolidated financial results from 2026 onwards.”
Reports that Iran has shut the strategic Strait of Hormuz, a strategic international shipping route again has sparked fresh concerns over global oil prices.
This latest shutdown comes barely 24 hours after it was reopened on the heels of a ceasefire arrangement with the United States.
According to a New York Post report which quoted the Islamic Revolutionary Guard Corps (IRGC), Iran cited a continued presence of United States forces in the region and Israel’s refusal to pull military forces out of southern Lebanon, where it had been pounding Hezbollah terrorists.
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The IRGC said the US violated the memorandum of understanding between Washington and Tehran, which President Donald Trump and Iranian President Masoud Pezeshkian signed last Wednesday.
The latest development has revived fears of disruptions to global crude oil supplies and a fresh rally in international oil prices, a scenario that could shake Nigeria’s downstream petroleum market.
The Strait of Hormuz remains one of the world’s most critical energy corridors, serving as the transit route for nearly a fifth of global oil consumption.
Any disruption along the waterway typically triggers nervous reactions in oil markets and raises concerns over energy security.
Industry observers warned that a prolonged closure could push crude oil prices higher, increase the cost of imported petroleum products and ultimately force a fresh upward adjustment in petrol prices across Nigeria.
For many Nigerians already grappling with high transportation and living costs, another spike in fuel prices would deepen existing economic pressures.
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