By Ali Elias
LAGOS — Nigeria’s drive toward fuel self-sufficiency has received a major boost following a new nationwide distribution framework that will channel up to 65 million litres of Premium Motor Spirit (PMS) daily from the Dangote Petroleum Refinery to domestic markets.
The President of the Dangote Group, Aliko Dangote, disclosed that the refinery has concluded a structured offtake agreement with 12 major petroleum marketing firms, a move expected to stabilise supply, curb speculative practices and reshape the downstream sector.
Under the arrangement, domestic demand will be prioritised, with surplus volumes estimated at 15–20 million litres daily earmarked for export. Nigeria’s daily petrol consumption currently ranges between 50 million and 60 million litres.
“This framework guarantees nationwide availability while positioning the country as a net exporter of refined petroleum products,” Dangote said in a statement.
Distribution network formalised
The agreement, endorsed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, assigns nationwide distribution responsibilities to a consortium of marketers, including MRS Oil Nigeria Plc, Nigerian National Petroleum Company Limited Retail, 11 Plc, TotalEnergies Marketing Nigeria, Rainoil Limited, Northwest Petroleum & Gas Company Limited, Ardova Plc, Bovas & Company Limited, AA Rano Nigeria Limited, AYM Shafa Limited, Conoil Plc and Masters Energy.
Industry analysts say the structured logistics model is designed to improve throughput efficiency, reduce hoarding risks and create price discipline across retail markets.
Capacity milestone and sector reforms
The refinery, designed for 650,000 barrels per day, has already exceeded expectations in test runs. The Group Chief Executive Officer of Nigerian National Petroleum Company Limited, Bayo Bashir Ojulari, recently described the facility as a “transformative national asset,” citing operational readings that surpassed initial projections.
The distribution pact follows earlier supply arrangements introduced in late 2025 to address volatility in pump prices and recurring supply disruptions. The broader initiative aligns with reforms pursued by the administration of President Bola Tinubu, including subsidy removal and deregulation of the downstream petroleum market.
Economic implications
For decades, Nigeria relied heavily on imported refined products despite being Africa’s largest crude oil producer, exposing the economy to exchange-rate pressures and global supply shocks. By meeting domestic demand and exporting refined products, policymakers expect the refinery to conserve foreign exchange, strengthen external reserves and improve the trade balance.
At full domestic supply capacity, the refinery could deliver between 1.8 billion and over 2 billion litres of petrol monthly, fundamentally altering the country’s fuel supply architecture.
Energy economists note that sustained operational stability will be critical to achieving the anticipated benefits. If successfully implemented, the structured offtake model could mark the most significant shift in Nigeria’s downstream petroleum sector in decades, reducing import dependence and reinforcing national energy security.