Nigeria’s energy landscape is experiencing a series of transformations, with competition and strategic reforms aimed at bolstering the country’s energy sufficiency. The removal of fuel subsidies by President Bola Tinubu’s administration, along with targeted efforts to revitalize local refineries, should create a more competitive and sustainable energy sector.
The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) has outlined that local refineries, including the Port Harcourt, Dangote, and Warri refineries, will receive a combined 123,480,500 barrels of crude oil between January and June 2025, meeting their total crude requirements for the period. The NUPRC has set a target of over two million barrels per day in crude oil production for the same period, based on its Project 1 Million Barrels, which was launched in October 2024. This is in line with the government’s push to reduce reliance on imported refined products, with an emphasis on increasing local refining capacity.
The removal of fuel subsidies, a move experts say will significantly reduce government expenditure and free up more money for sectors like education, health, and infrastructure, is set to increase competition in the energy sector by encouraging more private sector involvement. Already, with the coming onboard of the Dangote refinery, there’s a change in the equation. The policy shift is aimed at allowing market forces to determine fuel prices, driving efficiency, and attracting international players into Nigeria’s oil and gas industry.
The NUPRC’s forecast of a daily crude oil requirement of 770,500 barrels for local refineries, comprising nine active refineries, is an essential part of the strategy to maximize the operational capacities of these refineries. This forecast covers a substantial 37% of the projected daily crude production of over two million barrels per day, with the Dangote Refinery alone needing approximately 99.55 million barrels in the first half of 2025.
In 2025, Nigerians can expect the completion of refinery upgrades in Port Harcourt and Warri, and full-scale production from key refineries, including the Dangote Refinery, which is expected to substantially reduce the need for petroleum product imports. This, combined with President Tinubu’s reforms and the NUPRC’s commitment to securing crude oil supplies for local refineries, could lead to more consistent fuel availability and reduced costs, benefiting the general public.
However, this progress comes with challenges. The government’s capacity to manage inflationary pressures, the completion of necessary upgrades to refineries, and ensuring the efficient management of resources will be critical to the success of these reforms. We’ve been down this road before, especially with the federally owned refineries, where money is spent on turnaround maintenance with little or nothing to show at the end of the day. We must take an audit of every kobo spent; accountability and transparency are needed to move the sector forward.
Still, the increased competition resulting from these efforts could herald a new era of energy sufficiency for Nigeria.
We have already started seeing some real-life impacts as MRS Oil is now selling fuel for N935 per litre at all its stations across Nigeria. This price cut happened after the company made a deal with the new Dangote Refinery, which is now selling them fuel at a lower cost of N899.50 per litre. NNPCL has also reduced its price from over N1,000 to N965 per litre. Yes, the progress may be slow, but according to President Tinubu, we are walking towards the path of shared prosperity.
Ubong Usoro
