The Dangote Refinery has officially commenced its expansion to boost crude oil processing capacity to 1.4 million barrels per day (bpd), from 650,000 bpd, attracting positive reactions from industry analysts.
The move is expected to reinforce Nigeria’s position in the refining industry while significantly increasing local production and reducing reliance on imports.
Aliko Dangote, the business magnate behind the project, stated that the expansion will create around 65,000 new jobs, significantly boosting the country’s employment landscape.
He further emphasised that upon completion, the refinery will be the largest single-train refinery in the world, setting a new benchmark in global refining capacity.
Industry experts have applauded the project’s potential to stimulate economic growth, enhance energy security, and drive structural transformation within Nigeria’s oil and gas sector. The expansion aligns with government objectives to improve local refining capabilities and strengthen the national economy.
The refinery’s increased capacity will enable greater volumes of locally refined petroleum products, potentially lowering fuel import bills and enhancing domestic supply stability.
This step marks a significant milestone in Nigeria’s pursuit of self-sufficiency in petroleum refining.
Analysts remain confident that the Dangote Refinery’s scaling up will attract further investments, stimulate ancillary industries, and catalyse infrastructural development, ultimately contributing to the country’s broader economic development goals.
Dangote Refinery’s planned capacity expansion from its current 650,000 barrels per day(bpd) to 1.4 million bpd, they say, will enhance economic security and energy stability.
Experts Applaud Dangote Refinery Expansion
The experts, who spoke to LEADERSHIP about this development, applauded it, saying the move will elevate Nigeria more in the global energy sector.
The president of Dangote Industries Limited, Alhaji Aliko Dangote, on Sunday, announced that the 650,000 barrels per day capacity Dangote Refinery at Lekki Free Zone, Lagos, will be expanded to 1.4mbpd.
On his part, the director/CEO of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf who applauded this development, said:”This positions Nigeria as a potential dominant player in the industry, which is beneficial for the economy overall. This advancement not only enhances our economic security and energy stability but also improves our balance of payments.
“By increasing exports of refined products, Nigeria can strengthen its balance of payments, leading to greater currency stability and overall macroeconomic health.”
Yusuf emphasised the importance of government supporting initiatives like the Dangote Refinery to encourage further expansion and development in the sector.
He said such progress will positively impact all stakeholders in the downstream oil sector.
“We commend these developments and look forward to continued collaboration toward a thriving economic future,” he said.
Moreover, the chief executive of AntHill Concepts Limited, Dr Emeka Okengwu, said the development will disrupt the strangling dependence on imported fuel in Nigeria.
He noted that increasing capacity and meeting demand are not the same thing, stressing that the government will have to fulfil its part of the bargain by supplying Dangote with enough crude oil to meet the refinery’s capacity needs.
He said that should mean the end of the importation of petrol and an open market for the export of finished petroleum products.
“But if, in spite of the effort of Dangote, we are still importing fuel and crude, then I don’t see what difference that makes,” he said.
Financial economist at Nnamdi Azikiwe University, Dr. Felix Echekoba, said the move would strengthen Nigeria’s foreign reserves and the naira.
He stated that the expansion will drastically cut fuel imports, save foreign exchange, and make Nigeria a net exporter of refined products.
“It’s a game-changer for fiscal stability and job creation,” he said.
Another financial economist at Auchi Polytechnic, Zakari Mohammed, stated that the expansion will reposition Africa in global energy trade.
“It reduces Africa’s dependence on imported fuel and boosts regional supply under AfCFTA,” he said. “However, sustainability and environmental safeguards must not be overlooked.”
Analysts say the expanded refinery could make Nigeria a top refining hub, attract petrochemical investments, and strengthen its influence in global oil market, signaling a new phase in the continent’s industrial growth.
Dangote Refinery expansion will enhance Forex exchange stability – Okeke
A former Chief Economist at Zenith Bank Plc, Marcel Okeke, has described the planned increase in petrol refining capacity by the Dangote Petroleum Refinery from 650,000 barrels to 1.4 million barrels per day as a major economic boost that will benefit Nigeria’s domestic market, foreign exchange stability, and industrial growth.
Reacting to the announcement, Okeke said the expansion marks a turning point for Nigeria’s downstream oil sector and could significantly reduce the country’s dependence on imported petroleum products.
According to him, higher local refining capacity will automatically lead to increased supply in the domestic market, lower pump prices, and reduce import bills that have long put pressure on Nigeria’s scarce foreign exchange reserves.
“Dangote Refinery increasing its production capacity from 650,000 to 1.4 million barrels per day is a good thing for Nigeria,” Okeke said.
“If it increases local supply, it will affect price positively, meaning that more products will be available locally. The refinery is already selling at a price lower than importers, so if it raises production, it will take a larger portion of the market from those who import.”
He noted that the refinery’s pricing advantage and scale of operation would likely outcompete fuel importers, leading to a drop in import volumes and a corresponding reduction in dollar demand in the foreign exchange market.
“If Dangote supplies more locally, it means less of what is imported will be sold here. That will reduce the pressure on the foreign exchange market, which has been driven by importers who need dollars to bring in refined products,” he explained.
Okeke said the expected reduction in demand for foreign exchange would help stabilise the naira and improve investor confidence.
“Once that pressure is removed or seriously reduced, our exchange rate will begin to improve,” he stated.
“It’s the demand for dollars from importers that weakens the naira. But if local refineries meet domestic demand, that pressure will ease, and our currency will strengthen.”
He added that Dangote’s expansion would also send a positive signal to other licensed private refiners, encouraging them to scale up operations and contribute to national energy sufficiency.
“If Dangote is allowed to operate freely and begins to flourish at this scale, it will motivate other smaller refineries or those with licences to go full blast into refining,” Okeke said.
“You may not have heard much about them because of Dangote Refinery’s challenges in the past one or two years, but this development will boost their confidence.”
Beyond foreign exchange stability, experts believe that the refinery’s increased output could transform Nigeria’s balance of trade position by enabling petroleum product exports that would earn the country much-needed foreign currency.
“If it also increases supply outside Nigeria, it will be earning hard currency such as dollars or other global currencies,” he noted. “That will further strengthen the economy.”
He emphasised that the refinery’s success represents a landmark for industrialisation in Nigeria and Africa, noting that a fully operational and globally competitive refinery within Nigeria’s borders is a source of national pride.
“For a local refinery in Nigeria to play on the global stage in the refining business is great for the country. It’s something Nigerians should be proud of,” he said.
It Will Save Nigeria $50bn Annually – Aladje
Dr. Paul Alaje, the chief partner at SPM Professionals, noted that by doubling its capacity, the firm will save Nigeria $50 billion annually, which would put the country on a positive fiscal footing.
He said even though some stakeholders are angling to import fuel from Egypt, supporting Dangote is the right thing to do.
He added that the move will make Africa more independent of energy products.
He, however, cautioned that the West, which has been pushing for cleaner energy, will not be happy with the development.
The Dangote Refinery, located in the Lekki Free Trade Zone, Lagos, is the world’s largest single-train refinery. When its capacity expansion is completed, it is expected to meet Nigeria’s total domestic fuel demand and export refined products to other African and global markets.
Dangote Lay Out The Benefits of Expansion To Nigeria
Meanwhile, the president of Dangote Industries Limited, Alhaji Aliko Dangote, announced on Sunday that the 650,000 barrels per day capacity Dangote Refinery will be expanded to 1.4mbpd.
In the phased expansion plan, the refinery will by 2026 raise capacity to 700, 000 barrels per day.
He said the plan has a three-year timeline and will further help Nigeria solidify its position as a refinery hub. With the new development, the refinery will become the largest in the world.
During a media briefing in Lagos, he also reiterated plans to list the refinery on the Nigerian Stock Exchange to allow Nigerians to invest in it.
This ambitious project, supported by a technology licensing agreement, aims to position Dangote as Africa’s largest refinery and a global energy powerhouse.
The move, Dangote said, is driven by emerging opportunities across Africa, growing regional demand for cleaner fuels, and Nigeria’s evolving policy environment that encourages local refining.
Dangote said the $20 billion facility, already the largest single-train refinery in the world, will more than double its capacity within the next three years, making it a global leader in petroleum refining and a major driver of Africa’s industrial renaissance.
“This expansion reflects our confidence in Nigeria’s future, our belief in Africa’s potential, and our commitment to building energy independence for our continent and the world. It also is about confidence in Nigeria, in Africa, and in our capacity to shape our own energy future,” Dangote said.
Dangote revealed that, the expansion project will be executed over the next three years and will be financed through a mix of cash flow, public listing, and strategic investors, saying “when completed, the refinery will surpass India’s Jamnagar Refinery, currently the world’s largest, cementing Nigeria’s position as a global refining hub.”
He further revealed that the refinery will also expand its polypropylene production capacity from 900,000 metric tonnes to 2.4 million metric tonnes per annum, further boosting the output of linear alkylbenzene, a key ingredient in detergent manufacturing, along with additional production of base oils.
“With this expansion, the refinery transitions from producing Euro V to Euro VI fuel standards, meeting the highest global environmental benchmarks.
“We will also expand our power generation capacity to 1,000 megawatts, ensuring complete operational self-sufficiency. More than 85% of our workforce will be Nigerian, with continuous investment in skills development and technology transfer. Our commitment to safety, sustainability, and local participation remains unwavering throughout every phase of the expansion,” he said.
Highlighting the project’s economic impact, Dangote said the expansion will further strengthen Nigeria’s energy security, reduce foreign exchange outflows, and save the country billions of dollars annually that would otherwise go into importing refined products.
He estimated that the refinery’s revenue could exceed $55 billion annually, making it one of the most valuable industrial assets on the African continent.
Dangote reaffirmed plans to list a significant portion of the refinery’s shares on the Nigerian Exchange (NGX) within the next year, describing it as part of efforts to democratise ownership and allow Nigerians to share in the value creation.
“Our main listing will be here in Nigeria to give Nigerians value. We want the Dangote Refinery to be the golden stock of the Exchange. Listing outside Nigeria is secondary to us. We want this to be a national asset in every sense. This is a step toward broader ownership and market transparency.
“Therefore, we call on all Nigerians to seize this window, to benefit from this golden opportunity. Our long-term goal remains clear: to build Africa’s leading integrated energy and petrochemical hub the first of its kind on the continent,” he said.
He expressed gratitude to President Tinubu and the federal government for supporting industrialisation policies such as Nigeria’s First, Naira-for-Crude, and the One-Stop Shop initiative, which, he said, had emboldened investors to take on transformative projects.
He also commended the government’s intervention in mediating recent disruptions at the refinery linked to union activity and sabotage attempts, calling it a demonstration of effective collaboration between the public and private sectors.
Despite not yet recouping the initial investment in the 650,000 bpd phase, Dangote said the group is focused on long-term transformation rather than short-term returns.
He emphasised that Nigeria’s pump price remains among the lowest in the region despite the refinery’s production of higher-quality, cleaner fuels that have reduced toxic dumping in the country.
Dangote said the refinery had already made a difference by stabilising local fuel supply, helping to strengthen the naira, and preventing capital flight.
As Nigeria approaches the festive season, Dangote assured the public that despite recent global price increases, there would be no fuel scarcity or price hike during the ember months.
He called on other investors holding refinery licences to follow the example, urging collaboration in achieving President Tinubu’s vision of making Nigeria the refining hub of Africa.
