Nigeria's refining industry is poised for significant growth, with refiners requiring more than 1.5 million barrels of crude daily in the medium term. According to Adegbite Falade, Chairman of the Independent Petroleum Producers Group (IPPG), the country's liquids production stood at 1.68 million barrels per day in August 2026. This projected demand leaves a narrow margin for exports, government revenue requirements, and other factors.
The IPPG and Dangote Group have emphasized the need for a transparent domestic crude market, predictable commercial terms, and increased investment in pipelines, terminals, and other infrastructure. Falade highlighted that a refinery requires the right crude grade, in the right volume, of the right quality, delivered to the right location, at the right time, and under the right commercial terms. He called for aggregation of crude volumes, grade blending, transparent swaps, and substitutions.
The competitiveness of Nigeria's refining industry depends not only on installed capacity but also on access to suitable crude at commercially workable prices and efficient evacuation infrastructure. Representing Dangote Group President, Aliko Dangote, the group's Chief Economist, Dr. Hassan Mahmud, stressed that crude access is only one part of the ecosystem needed to make domestic refining competitive. He emphasized the need for policy stability, clarity on crude supply, imports, taxation, foreign exchange, product standards, and market access.
Locally refined products should compete with imports under equivalent regulatory, tax, quality, and commercial conditions. Mahmud noted that no refinery should survive simply because the government protects it, and no domestic refinery should be disadvantaged by a market structure that inadvertently makes imports more attractive than local production. He also highlighted logistics as a major constraint, with moving millions of liters of petroleum products by road remaining costly and inefficient.
The Crude Oil Refiners Association of Nigeria (CORAN) has also called for shared pipelines, storage terminals, jetties, and rail evacuation, alongside long-term financing and strategic product reserves to cushion supply disruptions. The Nigerian refining industry is expected to play a critical role in meeting the country's energy needs, and stakeholders are urging the government to create an enabling environment for growth.
Investors require clarity on the regulatory framework and market conditions to invest in Nigeria's refining industry. The government is expected to incentivize exploration, accelerate field development, support marginal fields, and improve access to capital, while modernizing pipelines, terminals, storage, and marine logistics. This will help to increase the country's refining capacity and reduce reliance on imported petroleum products.
The third Nigeria Oil Refining Summit in Lagos brought together stakeholders to discuss the challenges and opportunities in Nigeria's refining industry. With the right policies and investments in place, Nigeria can develop a competitive refining industry that meets domestic needs and exports surplus products to other countries.
Key points
- Oil refiners in Nigeria require more than 1.5 million barrels of crude daily in the medium term.
- A transparent domestic crude market and increased investment in infrastructure are necessary to support Nigeria's expanding refining industry.
- Policy stability and clarity on crude supply, imports, taxation, and market access are essential for attracting investment in Nigeria's refining industry.
