Nigeria is on track to cut its fuel deficit by 39% to 170,000 barrels per day (bpd) by 2025, down from 280,000 bpd, thanks to rising production levels at the Dangote and Port Harcourt refineries. This event, as highlighted in recent research by Kpler, a leading oil and shipping industry insights business, represents a watershed moment for Nigeria and West Africa’s petroleum sector.
According to Kpler, the ramp-up in refinery operations at these sites is likely to address Nigeria’s local fuel shortages while also strengthening West Africa’s overall petrol balances.
“Increasing refinery runs at Nigeria’s Dangote and Port Harcourt refineries throughout 2025 are expected to significantly lengthen West Africa’s petrol balances,” the firm stated.
This shift, however, presents challenges for European refiners, who have traditionally supplied a significant portion of Nigeria’s petrol needs. European gasoline exports to Nigeria plummeted to a four-year low of 70,000 bpd in December 2023, reflecting the growing impact of Nigeria’s refinery expansion.
A Game-Changer for Nigeria and Beyond
The Dangote Petroleum Refinery, a 650,000 bpd facility built by Nigerian billionaire Aliko Dangote, has been a focal point of this transformation. Located in Lagos, the refinery is designed to compete with European refiners when operating at full capacity. Despite initial challenges in securing sufficient crude oil locally due to production shortfalls and contractual obligations with the Nigerian National Petroleum Company (NNPC) Limited, the refinery has made significant strides.
Kpler’s report highlights the commissioning of key units within the refinery’s gasoline block, including the Reformer, Isomerisation, RFCC (Residue Fluid Catalytic Cracker), and Alkylation units. These advancements have already led to a sharp reduction in residue and naphtha production. “We estimate that Dangote’s RFCC, the most critical unit for high-volume gasoline production, is currently operating at 40-45% capacity, placing total Nigerian gasoline production above 100,000 bpd,” Kpler noted.
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The refinery’s progress is evident in its export trends. For instance, Dangote’s fuel oil exports dropped from 60,000 bpd in 2023 to just 6,000 bpd in the fourth quarter of 2024, while naphtha exports also saw a significant decline. Achieving higher yields and production volumes will depend on further optimising the RFCC unit rates, a milestone anticipated by late 2025.
Implications for West Africa and Europe
Kpler projects that increased production at Dangote will reduce Nigeria’s gasoline deficit from -280,000 bpd in 2024 to -170,000 bpd in 2025, with further reductions expected by 2026. While the refinery’s output will primarily cater to Nigeria’s domestic market, it is also set to become a major supplier across Western, Central, and Southern Africa. In the last quarter of 2024, Dangote Refinery shipped approximately 60,000 bpd to countries such as Congo, Ghana, Angola, and Cameroon.
This development aligns with recent observations by the Organisation of the Petroleum Exporting Countries (OPEC), which noted that the Dangote Refinery’s increased production has already reduced Nigeria’s reliance on imported refined products from Europe.
A New Era for African Energy
The expansion of Nigeria’s refining capacity marks a pivotal moment for the continent’s energy landscape. By reducing its petrol deficit and enhancing regional supply chains, Nigeria is not only addressing its own energy challenges but also positioning itself as a key player in Africa’s petroleum market.
As Kpler aptly summarised, “Dangote’s refinery is poised to reshape West Africa’s gasoline balances, offering a glimpse into a more self-sufficient and interconnected energy future for the region.”
For now, all eyes remain on Nigeria’s refineries as they work towards achieving full operational capacity, a milestone that promises to redefine the dynamics of global and regional energy markets.
