Dangote Refinery Saves Nigeria $20bn in Fuel Import, Report Shows
The 650,000 barrels per day capacity Dangote Petroleum Refinery in the Ibeju-Lekki area of Lagos is currently bailing the Federal Government out of a pressing financial crisis with the steady supply of foreign currencies, Business Hallmark can report shows.
The continued flow of FX to the refinery owned by Africa’s richest man, Alhaji Aliko Dangote, BH findings revealed, apart from adding to Dangote’s wealth, have also helped the nation to stabilize its struggling currency and bring down inflationary pressures.
According to findings, the nation, apart from being awash in foreign currencies, has drastically cut down its dollar spendings on imported refined petroleum products, which used to gulp about 40 percent of the country’s FX earnings, thanks to the coming on board of the world largest single-train refinery that commenced operations in January 2024.
It would be recalled that Nigeria has been battling a myriad of economic challenges, including a massive drop in crude oil production from a high of 2.4 million barrels per day to below 900,000 bpd; a sharp revenue drop; a failing economy and galloping inflation.
In a desperate move to address the situation, the incumbent President Bola Tinubu had effected a flurry of reforms, including the scrapping of the controversial fuel subsidy regime; unification of the multiple foreign exchange windows operated by the Central Bank of Nigeria (CBN), as well as the signing of executives orders to free up the troubled oil and gas sector, among many other reforms.
The policies, the government had argued, would help stop the nation’s economy from further bleeding, attract the needed foreign direct investment (FDI) and long-term capital that will help Nigeria to grow its productive capacity.
While the policies, particularly, the ramping up of crude oil production, had no doubt helped to stabilize the economy, the coming on board of Dangote Refinery, experts argued, has made a big impact by helping to crash the huge FX bill the nation spent on importing fuel and also contributes to public treasury.
On July 22, Nigerians got a much clearer picture of how the Dangote Refinery had been impacting the nation’s economy when the President of Dangote Group, Alhaji Aliko Dangote, revealed at the Global Commodity Insights Conference on West African Refined Fuel Markets held in Abuja, that the plant exported one million tonnes of Premium Motor Spirit (petrol) to other countries of the world between June and July this year.
“Today, Nigeria has actually become a net exporter of refined products. Before I came on the podium, I asked my people how many tonnes of PMS we have actually exported. From June beginning to date, we have exported about 1 million tonnes of PMS, within the last 50 days”, Dangote had disclosed.
A breakdown of the 1 million tonnes of petrol exported by Dangote by BH showed that the refinery exported 27 million litres of petrol daily within the period.
For instance, one (1) ton of petrol is roughly equivalent to 1,350 liters. This translates to 1,350,000,000 (1.350 billion) liters for the 1 million tons exported by Dangote Refinery in the period under review.
At the current local pump price of N865, it translates to a revenue of N1,167,750,000,000 (N1.168 trillion) for the company, which is $763,235,294.11765 at the present exchange rate of N1535/$.
Meanwhile, Dangote is also exporting other refined petroleum products from his refinery like aviation fuel, diesel, and naphtha to neighbouring African countries, America, Europe and Asia, meaning that more foreign currencies have been flowing into the country through the plant.
For instance, in February this year, the Dangote Refinery exported two jet fuel cargoes to Saudi Aramco, the national oil company of Saudi Arabia and the world’s largest oil producer.
When the cargoes (ultra-large container ships with fuel capacity of 3 million to 5.5 million gallons were shipped in February, a liter of diesel in the International oil market was $1.22.
Using the median of 3 million gallons per cargo, BH calculates that Dangote supplied nothing less than 24 million liters to its U.S customers in February alone, translating to a revenue of $29.3 million (exclusive of other transaction charges).
About a month after shipping aviation fuel to Saudi Arabia, the refinery expanded its footprint in the global energy market when it supplied over 2 million barrels of jet fuel to the United States in March 2025.
A barrel of aviation fuel nominally contains 55 U.S gallons or 200 liters, meaning a cargo contains 200 million litres and the two exported cargoes amounted to 400 million litres.
At the time of the transaction in March, a litre of Jet-A fuel stood at $1.66. This translates to a revenue of $664million earned by Dangote on the two exported cargoes to the U.S.
The refinery has also been exporting gasoline to other countries like Oman, Malaysia, Ivory Coast, Ghana, Cameron, Singapore and Niger.
These included 90,000 metric tonnes exported via the Pis Kerinci to Sohar, Oman; 89,000 metric tonnes on the Hafnia Larissa to Pasir Gudang, Malaysia; 35,000 metric tonnes on the Sabaek to Abidjan, Ivory Coast; and a further 39,000 metric tonnes aboard the Sabaek in June.
Apart from petrol, diesel and aviation fuel, Dangote Refinery also produce and export other products, such as naphtha, a partially refined petroleum fraction used chiefly as solvents and as raw material to produce petrol.
It was gathered that the Dangote refinery rakes in about $2billion monthly ($24bilion annually) from its overseas trading, which is about $3billion in excess of remittances of $20.93 billion from Nigerians in the Diaspora in 2024.
BH has not been able to independently confirm this figure as all official sources contacted in Dangote declined comment.
The Dangote Refinery has also singlehandedly cut Nigeria’s fuel importation by more than 50 percent, thus helping the nation to save billions of dollars hitherto spent on importing refined petroleum products.
From petrol to diesel, aviation fuel, kerosene, liquefied petroleum gas (LPG) and polypropylene, Dangote has also grown its market share in the Nigerian downstream petroleum sector, displacing huge volumes of imported products the country once relied on.
In a report released in June, the National Bureau of Statistics (NBS) disclosed that Nigeria’s reliance on imported petrol dropped significantly in the first quarter of 2025 as petrol import bill crashed by 54 percent year-on-year.
The bureau attributed the sharp decline in fuel importation to improved domestic supply from the Dangote Petroleum Refinery.
According to the NBS, Nigeria splashed $1.2 billion on petrol imports in Q1 2025, down from $2.6 billion in the same period last year, representing a savings of $1.4billion.
This marks the lowest quarterly import bill since 2020 and reflects the growing impact of the 650,000-barrel-per-day Dangote Refinery.
The NBS data revealed that Nigeria spent N1.76 trillion on petrol imports in naira terms in the first quarter of 2025, indicating a 46.68 percent decrease from the preceding quarter.
Meanwhile, products importation from other countries dropped by 33.14 percent year-on-year from N2.63 trillion in the first quarter of 2024 to N1.76 trillion in Q1 2025.
Also speaking in June, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) said Nigeria’s petrol imports had plunged by 30 million litres.
Available date shows that Nigeria has a highly controversial daily fuel consumption rate of 65 million liters. This includes 45 million liters of petrol, 15 million liters of diesel and 5 million liters of aviation fuel.
According to the Chief Executive Officer of NMDPRA, Farouk Ahmed, the nation’s daily petrol importation decreased from 44.6 million liters in August 2024 to 14.7 million liters as of April 13, a huge decrease of 29.9 million liters. Ahmed attributed it to increased local production.
Meanwhile, Aliko Dangote declared in February that his refinery now accounts for about 60 percent of Nigeria’s domestic petrol consumption, helping to ease pressure on FX demands and improving the trade balance.
According to available records, Nigeria spend between $20 billion to $25 billion annually to import petroleum products from 2002 to 2022. The huge bill has, however, dropped to about $8 billion and $10 billion dollars after the present administration removed fuel subsidy in May 2023.
Speaking at a Federal Executive Council (FEC) meeting in September 2024, the Executive Chairman of the Federal Executive Council (FIRS), Mr. Zacch Adedeji, lamented that Nigeria was spending $600 million monthly on importation of petrol, amounting to about $9.72 billion annually.
With Dangote Refinery now supplying more than half of Nigeria’s petrol needs, the nation has been able to cut its FX spendings on the commodity by about $5 billion.
The FIRS boss also declared at the FEC meeting back in September 2024 that Nigeria would be saving $7.32 billion annually from the naira for crude swap deal the government signed with local refiners.
BH reliably gathered that Dangote Refinery, with about 60 percent of local crude oil allocation, currently gets about half of its feedstock locally, translating to another annual $3 billion in FX savings for the country.
As a result, the nation’s foreign exchange reserves has climbed to a little over $40 billion, according to the CBN governor.
Also, owing to the continued inflow of FX and appreciation of the naira, FX-induced inflation has continued to cool, with headline inflation now 22. 22 percent in June.
According to Dr. James Apata, an economist based in Lagos, Nigerians should expect better days.
“People are not seeing it yet, but a 180-degree turn has occured for Nigeria’s economy. The refinery has steadied the sinking ship. Its impacts on the economy will soon start to manifest.
“Unfortunately, I have listened to some uninformed experts, who argued that the refinery project is private and as such will not benefit the nation. But what they fail to realize is that there is no way Dangote will prosper without Nigeria prospering.
“For instance, the Dangote Group is the highest tax payer in the whole federation today. The group paid over N450 billion in taxes in 2024, making it the highest taxpayer in the country. And we’re talking of federal levies alone, as states and local governments taxes are not captured here.
“All income earned, whether in naira or foreign exchanges, are taxed. So, it is a win-win for the government. Apart from that, FX earnings help to stabilize the economy. It helps to reduce import-pushed inflation and prop up the naira.
“Between April 2023 and April 2024, the average price of imported food commodities into Nigeria rose to its highest level, reaching 34 per cent in one year. It is now below 22 percent and doing better than local-push inflation.
“This is due largely to the appreciation in the value of the naira which has made imported goods to be cheaper. I think Nigeria’s bet on the refinery is finally panning out”, Apata said.
SOURCE: Business Hallmark