Local Refining Drives Nigeria’s Fuel Supply Growth
Expanded local refining boosted Nigeria’s petrol supply, reduced imports, and strengthened the country’s energy security during the first half of 2026.
Nigeria domestic refining recorded significant progress in the first half of 2026, with locally refined petrol accounting for 78.6 per cent of national supply, up from 38.9 per cent in 2025. The sharp increase reflects a major shift from reliance on imported fuel to stronger domestic production, according to the Nigeria Half Year Downstream Industry Report released by the Major Energies Marketers Association of Nigeria (MEMAN).
The report showed that petrol imports declined to 21.4 per cent during the period from 61.1 per cent in 2025. Local production of automotive gas oil (diesel) also improved, rising to 68 per cent from 35.6 per cent, while diesel imports dropped to 32 per cent from 64.4 per cent. However, domestic production of liquefied petroleum gas (LPG) slipped slightly to 86.9 per cent from 89.1 per cent, with imports increasing marginally to 12.1 per cent.
According to MEMAN, Nigeria domestic refining became the primary source of petrol and diesel during the first half of the year as refining capacity continued to expand. The report added that reduced import licences and disruptions to global trade also contributed to the decline in fuel imports.
Several industry milestones supported this performance. Dangote Petroleum Refinery exceeded 100 per cent operational efficiency in May 2026, operating above its nameplate capacity. Waltersmith Refinery doubled its refining capacity from 5,000 barrels per day to 10,000 barrels per day in April, while OPAC Refinery resumed operations in June with naphtha production. Nigeria’s Jet A-1 output also increased significantly, with international markets sourcing more aviation fuel from the Dangote refinery during the Middle East conflict.
The report noted that strategic fuel stockpiling in November and December 2025 created a 30.8-day petrol stock buffer by January 2026. This reserve helped absorb a severe 17.4 million litres per day supply deficit in February, preventing widespread shortages and long fuel queues. Imports continued to play a supporting role by helping marketers manage refinery maintenance periods and maintain adequate fuel stocks.
Analysts said the strong performance of Nigeria domestic refining was largely driven by the rapid expansion of operations at the Dangote Petroleum Refinery, which supplied more than 81 per cent of the country’s petrol requirements early in the year. They noted, however, that domestic output fluctuated later because of crude oil supply constraints.
Looking ahead, MEMAN said the focus for the second half of 2026 has shifted from increasing refining capacity to building a more competitive, transparent, and resilient downstream petroleum market. The association said this aligns with the priorities of the new Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Rabiu Abdullahi Umar, who has emphasised stronger regulatory oversight, greater market transparency, improved stakeholder collaboration, and data-driven decision-making.
The report also stressed that although local refining has significantly reduced Nigeria’s dependence on imported petroleum products, imports will remain important for maintaining supply diversity, supporting competition, and protecting energy security. It recommended establishing a National Strategic Stock to strengthen the country’s ability to respond to refinery outages, logistics disruptions, import delays, and geopolitical shocks.
Do you think Nigeria can eventually meet all its fuel needs through local refining while maintaining healthy market competition?
