Nigeria’s fuel supply chain has undergone a fundamental restructuring, with the Dangote Petroleum Refinery now accounting for approximately 92 percent of daily petrol supply as imports have collapsed under a new government policy suspending import licences. Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority shows that local refineries supplied about 36.5 million litres of petrol per day in February 2026, out of total daily supply of 39.5 million litres. Imports dropped to just three million litres daily following the policy shift earlier this year.
This marks a dramatic reversal from previous months when Nigeria remained heavily dependent on imported fuel. In January, imports averaged 24.8 million litres per day, contributing to a total supply of 64.9 million litres. The transition positions the Dangote refinery as the dominant supplier in the domestic market, with smaller modular refineries primarily producing diesel rather than petrol. The facility is currently the only plant producing significant volumes of petrol in Nigeria.
For Nigeria’s economy, the shift carries significant implications. Reduced imports ease pressure on foreign exchange reserves, as the country no longer needs to source dollars to pay for large volumes of refined products. This supports the naira and reduces one of the structural drains on external reserves that have historically contributed to currency volatility. The savings in foreign exchange, if sustained, could accumulate to billions of dollars annually.
However, industry players have raised concerns about the emergence of a dominant supplier in the downstream sector. The Dangote refinery’s market position raises potential monopolistic risks, including the possibility of price setting that disadvantages consumers and independent marketers. Without effective competition, the benefits of local refining could be captured by the producer rather than passed through to Nigerian households and businesses.
The policy environment will need to evolve to address these concerns. Regulatory oversight of pricing, quality standards, and market access becomes increasingly important as the market concentrates. The Nigerian Midstream and Downstream Petroleum Regulatory Authority faces the challenge of ensuring that the transition to local refining delivers broad-based benefits rather than simply transferring economic rent from foreign suppliers to a domestic monopolist.
For consumers, the immediate impact has been mixed. While local refining theoretically should reduce costs by eliminating international shipping and trading margins, retail prices have continued to rise, driven by global crude prices and the refinery’s commercial pricing decisions. The pass-through of global oil market volatility remains, as the refinery must purchase crude at international prices, whether sourced locally or imported.
The transition also carries implications for employment and economic activity. The decline in imports reduces activity at coastal depots and among import-dependent logistics firms, potentially affecting jobs in those sectors. However, the refinery’s operations create employment directly and support activity across the downstream value chain.
Longer term, the success of Nigeria’s refining strategy depends on expanding capacity beyond the current dominant player. Additional refineries, whether new facilities or revived state-owned plants, would introduce competition and reduce concentration risk. The government has signalled support for such expansion, but progress has been limited.
The February data represents a snapshot of a sector in transition. The dominance of a single supplier is not necessarily permanent, but it reflects the current reality of Nigeria’s refining landscape. Managing this transition effectively requires policy attention to competition, pricing, and the distribution of benefits across the economy.
