Nigeria’s energy sector is set to experience a major shift with the new deal between the Dangote Refinery, the Nigerian National Petroleum Corporation (NNPC), and independent oil marketers.
This new partnership promises to save Nigeria at least $14.3 billion annually by reducing its dependence on fuel imports.
For decades, Nigeria has been heavily reliant on importing petrol, spending an estimated $15 billion every year to meet its domestic fuel needs. However, with this new agreement to source petrol directly from Dangote’s local refinery, the country is poised to reduce these high costs and shift towards more affordable, homegrown energy solutions.
A report from the Organisation of the Petroleum Exporting Countries (OPEC) revealed that Nigeria’s petrol imports rose in October 2024, despite the Dangote Refinery beginning its production of petrol in September. The country imported 1.5 million metric tonnes of petrol and 414,018.764 metric tonnes of diesel during the period between October 1 and November 11, 2024. These imports, valued at about $1.9 billion or nearly N3 trillion, indicate that Nigeria’s reliance on foreign fuel is still significant.
Even though petrol imports were 60 percent lower compared to the same time in 2023, the amount of petrol imported into Nigeria between September and October 2024 showed a concerning increase. Much of this imported petrol came from Europe, as several ships arrived in Nigeria, and fuel sellers had disagreements with the Dangote Refinery.
OPEC’s monthly oil market report stated that gasoline exports to West Africa, including Nigeria, increased, compensating for a decline in exports to the US. Despite the reduction in imports compared to 2023, Nigeria’s fuel importation still remains a key issue.
However, the new agreements among Dangote Refinery, NNPC, and oil marketers could mark the end of Nigeria’s fuel importation struggles. Instead of relying on imports, the plan is to purchase petrol directly from Dangote’s refinery, which will significantly reduce the country’s import costs. This move aims to stabilize fuel prices and make fuel more affordable for consumers across Nigeria.
Energy expert Faith Nwadishi welcomed this development, stating that the shift to buying locally refined fuel would save Nigeria at least $14.3 billion annually. “Nigeria depends on this. The economy depends on this,” Nwadishi said. “If there’s no fuel, you see the hardship it takes on people. Products cannot come from farms to markets,” she added. This move, she believes, will go a long way in easing the strain on the nation’s economy, which has long suffered from the high costs of fuel imports.
David Etim, another energy expert and entrepreneur, shared similar optimism. He emphasized that energy independence is a critical issue for Nigeria. “Energy self-sufficiency or energy dependency is actually a national security issue,” Etim said. “No country in the world that depends on outsiders to provide such an essential input to its social life as energy can call itself independent. So, the fact that Nigeria has moved from energy dependency to energy independence is a significant move in a very positive direction,” he added.
The new deal is expected to have a major impact on the country’s fuel prices, which have surged in recent years. Some areas in Nigeria are currently paying over N1,200 per litre of petrol, or approximately $0.71. With Dangote’s refinery producing local petrol, Nigerians can expect more stable fuel prices, offering much-needed relief to consumers who have been struggling with high fuel costs.
