High Petrol Export Good For Nigeria, Not Affecting Domestic Supply – Operators

BY CHIKA IZUORA, KINGSLEY OKOH, Lagos

Key stakeholders and operators in Nigeria’s midstream oil and gas sector have dismissed suggestions that petrol prices should fall simply because local refining has become more efficient, insisting that the country’s rising export of refined petrol is beneficial to the economy and is not responsible for the high pump prices being experienced by consumers.

They also maintained that there is no empirical evidence to support claims that Nigeria is either importing refined petrol unnecessarily or that there is sufficient justification to question the rationale for exporting the product, even as recent statistics show that the country earned N998.50 billion from the export of Premium Motor Spirit (PMS) in the first six months of 2026.

Data from the National Bureau of Statistics (NBS) indicated that petrol export earnings in the period under review surged more than sixfold compared with the corresponding period of the previous year, with African countries accounting for N621.72 billion of the total earnings.

Reacting to the development, chairman of Integrated Oil & Gas Ltd, Capt. Emmanuel Iheanacho, which operates ocean-going tanker vessels, said accurate data would be required to determine actual production levels and domestic demand before any decision on export could be properly justified.

Iheanacho, Nigeria’s former minister of Interior, suggested that the fluctuating prices of petrol and complaints by Nigerians that the product is still selling above their expectations could be linked to higher exports contributing, in the aggregate, to supply-level disruptions, thus keeping prices at their present levels.

He, however, noted that the Dangote Refinery is in a better position to provide adequate supply information alongside the regulatory authorities.

In his own view, the executive secretary of the Major Energies Marketing Association of Nigeria (MEMAN), Clement Isong, posited that the government should be realising more revenue through enhanced export of refined petroleum products, and that such income should be channelled towards providing the necessary infrastructure to grow the economy.

“I think the export volume is good for the economy because government would have more revenue flow and my advice is that such income be judiciously administered, especially now that emphasis is placed on expanding the Compressed Natural Gas (CNG) as a viable alternative to petrol to reduce cost of transportation,” Isong said.

Significant shift in Nigeria’s petroleum landscape

The development marks a significant shift for Nigeria, which for decades depended heavily on imported refined petroleum products despite being a major crude oil producer.

However, the rise in petrol exports has coincided with increasing prices in the domestic market, with recent reports showing filling stations adjusting their prices following the Dangote Refinery’s latest gantry-price increase.

LEADERSHIP checks indicate that petrol currently sells for about N1,400 per litre in Lagos, Ogun and Abuja, while prices have reached about N1,500 in some parts of northern Nigeria.

Reuters reported that the latest price increases occurred despite the Dangote Refinery operating at full capacity, with the impact being particularly severe on motorists and commercial transport operators.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), on its part, called for an open and competitive petroleum products market, saying this would promote affordable pricing and transparency in the downstream petroleum sector.

The call comes as the price of petrol continues to swing higher than expected, further creating more hardship for citizens.

National president of PETROAN, Dr Billy Gillis-Harry, specifically stated the need to develop a Petroleum Quality Assurance and Quality Control and Price Intelligence System, which he said would track product volumes, quality and prices across the downstream sector.

According to him, the system would enable retailers to monitor the quantity and quality of products loaded, while also providing information on the source and landing costs of products, thereby improving transparency.

Gillis-Harry commended the Dangote Petroleum Refinery for its investment in the sector, but said other refiners and product suppliers should be allowed to participate in the market.

“Nigeria cannot afford a situation where one company controls the supply of petroleum products,” he said, stressing the need to encourage investments in other refineries to expand domestic refining capacity.

Gillis-Harry cited the planned 25,000 barrels-per-day Azikel Refinery in Bayelsa as one of the emerging projects that could contribute to the country’s domestic refining capacity.

He said competition among refineries and product suppliers would promote market-based pricing and give consumers access to affordable petroleum products.

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Domestic supply data contradicts scarcity claims**

The latest data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) showed that domestic petrol receipts rose by 39 per cent in August, from 25.8 million litres per day in July to 35.9 million litres per day.

Over the same period, petrol imports fell by 26 per cent from 19.7 million litres per day to 14.6 million litres.

Total PMS receipts also increased by 11 per cent, from 45.5 million litres per day in July to 50.5 million litres per day in August.

The NMDPRA figures further showed that the Dangote Refinery supplied 35.87 million litres of petrol daily to the domestic market in August, while exporting 9.73 million litres per day.

The refinery also ended the month with 360.4 million litres of petrol in stock.

The figures indicate that the increase in exports did not coincide with a corresponding collapse in domestic supply. Instead, domestic petrol receipts increased while imports declined.

For consumers, however, the increase in petrol exports and domestic refining capacity has yet to translate into corresponding relief at the pump.

With motorists paying as much as N1,500 per litre in some locations, commercial transport operators raising fares and some vehicle owners reportedly parking their vehicles, the benefits of Nigeria’s changing petrol supply structure remain a matter of concern for households and businesses.

Speaking to a Lagos-based truck driver in Festac, Kenneth Nzechukwu said the rising cost of petrol was reducing his take-home earnings.

“After spending so much on fuel, there is hardly anything left from our earnings to take care of our families,” he said.

At Okota in Lagos, reports indicate that some motorists have parked their vehicles because of the rising cost of petrol, while commercial tricycle operators have increased fares by about 50 per cent, depending on the distance traveled.

Generally, short trips that previously cost about ₦200 now reportedly cost about ₦300, while longer journeys range between ₦500 and ₦700.

In Amuwo Odofin area of Lagos State, a motorist, Paul Iwezue, said he bought petrol at almost N1,400 per litre.

“I bought it this morning,” he said.

Both Iheanacho and Isong noted that Nigeria’s petroleum market has changed dramatically with the emergence of the Dangote Refinery, which has reduced the country’s dependence on imported refined products and is now operating above its original 650,000-barrel-per-day design capacity.

Both of them, however, argued while speaking with our correspondent that local refining does not automatically mean cheap petrol, because there are some other associated factors in the refining process.

They explained that crude has to be extracted, transported, processed and refined before products such as petrol, diesel, aviation fuel and kerosene can be obtained.

Refining crude locally removes one problem but not every cost, because for years, Nigeria exported crude and imported much of its petrol because its state-owned refineries were unable to meet domestic demand.

That meant Nigeria was paying for imported refined products, shipping, insurance, foreign exchange and other associated costs.

However, Dangote Refinery has changed that equation by allowing a much larger share of Nigeria’s fuel requirements to be supplied from within the country.

The refinery supplied nearly 80 per cent of domestic petrol demand in April 2026, according to an EIU assessment cited by Dangote Industries.

Others have also argued that even if a Nigerian refinery buys Nigerian crude, that crude is not free because oil is an internationally traded commodity, and its value is influenced by global oil prices.

So a refinery cannot simply treat locally produced crude as having zero cost because it came from Nigeria, and the international oil market remains a major factor.

When global crude prices rise, the value of the crude going into refineries rises as well, and that can eventually feed into the price of refined products.

They said that refining is a business, not a giveaway, and a refinery has enormous costs to recover, including the cost of crude, financing, maintenance, electricity and other operational expenses, logistics, storage and distribution.

The refinery also has to remain commercially viable.

So the fact that a product is refined locally does not mean the refinery must sell it below its economic cost.

For marketers, getting the petrol from a refinery to a filling station is another part of the price chain.

Fuel has to be stored, transported and distributed across a country as large as Nigeria, and those logistics costs eventually form part of what motorists pay at the pump.

The price at the refinery is not necessarily the pump price because there is an important difference between the gantry price and the price motorists see at filling stations.

A refinery can sell petrol to a customer at its loading point, but the product still has to move through the distribution chain before reaching consumers.

This explains why pump prices can differ from one location or station to another.

Focus on export–supply–price relationship

The latest developments therefore put renewed focus on the relationship between Nigeria’s growing petrol exports, domestic supply, refinery pricing and the prices ultimately paid by consumers.

Gillis-Harry also said crude oil would remain relevant in spite of the growth of alternative energy sources, stressing the need for Nigeria to protect the environment while maximising the benefits of its petroleum resources.

He said PETROAN was committed to ensuring accurate dispensing of petroleum products at retail outlets, urging motorists to report suspected cases of under-dispensing at outlets displaying the association’s sticker.

He said the association would continue to collaborate with regulators, including the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Federal Competition and Consumer Protection Commission, to promote transparency and fair competition.

Despite the increase in local supply, however, petrol prices have continued to respond to movements in the international oil market.

Dangote Refinery raised its petrol gantry price from N1,265 to N1,350 per litre effective September 12, marking its fourth upward adjustment since August 21.

The successive increases have lifted the refinery’s gantry price by N185, or 15.9 per cent, in 22 days, with recent reports attributing the increase to elevated international crude oil prices.

The development highlights the continued connection between domestic petrol prices and international crude prices, even as Nigeria expands its domestic refining capacity.

NMDPRA: Petrol pricing fully deregulated

NMDPRA head of Public Affairs, George Ene-Ita, attributed petrol-price volatility to factors including crude-oil sourcing, the time lag between crude procurement and delivery, transportation and landing costs, marine and inland taxes, as well as the relatively narrow domestic refining base.

He also said petrol pricing had been fully deregulated, with refinery pricing templates and ex-depot prices not regulated under the current framework.

According to him, greater price stability would depend on the emergence of a more competitive and sustainable domestic refining ecosystem.

Import approval raises questions

Meanwhile, the federal government has approved another 830,000 metric tonnes of petrol imports for the fourth quarter of 2026 to guard against possible supply shortages during the Yuletide period.

The approval has raised questions among industry stakeholders, particularly as domestic petrol receipts exceeded imports by 21.3 million litres per day in August.

Economist and chief executive officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, argued that petrol import approvals should be tied to transparently verified domestic supply gaps.

He warned that unnecessary imports could weaken domestic refinery utilisation and undermine investments in local refining.