Dangote Refinery
Dangote Refinery could save Nigeria over N15trn yearly, generate $11bn in FOREX – Alliance Chairman, Dele Oye
The Chairman of the Alliance for Economic Research and Ethics LTD/GTE, Dele Oye, has stated that the Dangote Petroleum Refinery has the potential to save Nigeria more than N15 trillion annually in fuel import costs and generate around $11 billion in foreign exchange through local refining and petroleum product exports.
In a statement, Oye noted that despite the refinery’s operational capacity, Nigeria continues to suffer major foreign exchange losses due to its dependence on imported refined products. He argued that the Nigerian National Petroleum Company Limited’s persistent defence of fuel import licences undermines the country’s drive for energy self-sufficiency and economic sovereignty.
According to Oye, Nigeria spent roughly N15.42 trillion on petrol imports in 2024, calling this figure a severe drain on foreign reserves and a structural flaw in the nation’s energy framework. He pointed out that the Dangote Refinery, which processes 650,000 barrels per day, can meet over 90% of Nigeria’s domestic fuel needs and could drastically cut import reliance if fully incorporated into the national supply system.
Oye further estimated that greater dependence on local refining could save Nigeria up to $11 billion annually in forex outflows, easing pressure on the naira and enhancing macroeconomic stability. He described NNPC’s justification for continued imports—citing the need for competition—as flawed, arguing that it effectively reinforces dependency on foreign refineries while stifling 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 emphasised 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, with imports intended only as a short-term measure when local capacity falls short. Oye questioned the consistency of NNPC’s position, noting that while the company raises concerns about monopoly risks from a private refinery, it continues to lean heavily on foreign supply chains for domestic fuel consumption.
He added that sustained fuel imports expose Nigeria to global price volatility, forex pressure, and domestic job losses, while exporting value-added opportunities to foreign refiners and logistics operators. Oye called for a review of import licensing under the PIA, stronger protections for domestic refineries, and fiscal incentives to encourage more private investment in refining infrastructure.
He also urged greater transparency in refinery rehabilitation projects and accountability for past turnaround maintenance spending, arguing that inefficiencies in state-owned refineries have prolonged import dependence. Citing global examples from Brazil, Saudi Arabia, India, and the United States, where domestic refining capacity is protected and supported through targeted industrial policies.
Oye warned that Nigeria risks undermining its industrialisation agenda by failing to prioritise local refining over import dependency, despite existing production capability.
Addressing NNPC’s recent court filings accusing the Dangote Refinery of seeking to monopolise Nigeria’s fuel market, Oye said: “The Nigerian National Petroleum Company Limited 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 monopolize 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.”
Oye described the Dangote Refinery as proof of what Nigerian capital, vision, and perseverance can achieve. Built at roughly $20 billion, the facility processes 650,000 barrels of crude daily, produces up to 53.6 million litres of petrol and 23.6 million litres of diesel per day, meets over 90% of domestic demand, can save Nigeria $6–11 billion annually in forex outflows, and is already exporting jet fuel to European markets—demonstrating global competitiveness.
He added that the refinery can meet 100% of Nigeria’s requirements for all refined liquid products, including petrol, diesel, kerosene, and aviation fuel, with surplus for export, and currently exports petrol, diesel, and jet fuel across Africa, Asia, the Americas, and Europe.
He declared: “NNPC’s litigation against Dangote Refinery using the language of ‘monopoly’ to defend importation is not merely a policy error. It is 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—the courage to prioritize Nigerian industries over foreign suppliers, Nigerian jobs over foreign profits, and Nigerian sovereignty over convenient dependency.
“President Tinubu’s economic agenda calls for production over consumption, industrialization over importation, and sovereignty over subservience. 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 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.”
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