Nigeria’s push to liberalise its downstream petroleum sector is beginning to yield tangible fiscal dividends, with the country recording savings of more than ₦6 trillion from reduced petroleum product imports within the first nine months of 2025. The savings reflect the combined impact of policy reforms, expanding domestic refining capacity, and a gradual shift away from import dependence.
The development was disclosed at the 2026 Nigerian International Energy Summit (NIES) held in Abuja, where the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) highlighted the economic gains flowing from the full deregulation of the downstream sector.
According to the authority’s chief executive officer, Saidu Mohammed, reforms introduced under President Bola Tinubu’s administration have fundamentally reshaped the operating environment. These measures include foreign exchange harmonisation, the adoption of naira-based crude oil and petroleum product trading, and the increased utilisation of domestic refining assets.
Mohammed described the outcome as an “early but irreversible renaissance” in Nigeria’s downstream petroleum industry. He noted that for decades the sector struggled under the weight of chronic infrastructure gaps, weak market structures, inefficient supply chains, low investment appetite, and poor safety and environmental practices. These challenges, he said, entrenched fuel scarcity and pricing distortions that burdened consumers and the wider economy.
That trajectory began to change with the implementation of the Petroleum Industry Act (PIA) 2021, which provided a new legal and regulatory foundation for the industry. Mohammed said the Act has helped transform the downstream segment into a fully liberalised market, effectively ending the era of persistent petrol shortages and supply uncertainty.
Within a relatively short period, he added, the sector has transitioned to a more stable supply framework where pricing is increasingly influenced by market fundamentals rather than administrative controls. This shift, according to the regulator, is creating the conditions necessary to attract sustainable private investment.
A key pillar of this transformation has been the expansion of local refining capacity. Mohammed noted that Nigeria’s reliance on imported petroleum products is steadily declining as domestic refineries come on stream, logistics improve, and private-sector participation deepens across the value chain.
He singled out the Dangote Petroleum Refinery as a major driver of this progress, stating that the facility now meets a significant portion of Nigeria’s domestic petroleum product demand and, in some instances, is capable of supplying the entire local market. The refinery’s performance, he said, underscores the strategic importance of large-scale private investments in achieving energy security.
Looking ahead, Mohammed said Nigeria’s total refining capacity is projected to exceed one million barrels per day in the medium term. This growth is expected to come from a combination of licensed private refineries nearing completion and the ongoing rehabilitation of plants owned by the Nigerian National Petroleum Company (NNPC) Limited.
Despite the gains recorded so far, the NMDPRA chief stressed that effective and predictable regulation remains essential to sustaining momentum. He said the authority is committed to transparent, rule-based oversight that strikes a balance between consumer protection and commercial viability.
In his words, market confidence is the true currency of reform. Investors, he explained, are drawn to environments where contracts are respected and rules are stable, while consumers place trust in systems they perceive as fair and predictable.
Mohammed reaffirmed the authority’s commitment to working closely with industry stakeholders to consolidate the reforms and ensure that Nigeria’s midstream and downstream petroleum sector remains competitive, transparent, and attractive to long-term investment.