The Africa Energy Chamber (AEC) has advised Nigeria to focus on domestic refining to reduce exposure to imported product shocks, conserve foreign exchange, support naira stability, deepen industrial linkages, and strengthen regional trade. Chairman of the Chamber, NJ Ayuk, advised in a statement and review linked to his newly published book, ‘Crude Oil: Power, Turnaround and Transformation in Angola’.
He, however, noted that reduction in production shock depends on how organised Nigeria’s downstream sector is. According to him, although a single large refinery can transform supply conditions, a durable downstream market also needs competition, transparent regulation, reliable crude supply, efficient logistics, and clear export frameworks.
“The Dangote Refinery has already altered expectations. It has shown that private capital can reshape a sector long dominated by state failure and import dependence. But it has also exposed unresolved questions: crude supply obligations, pricing models, regulatory coordination, product quality standards, distribution margins, market competition and the relationship between domestic supply and export opportunities.
“These are not minor issues. They will determine whether Nigeria’s downstream transformation becomes broad-based or narrowly concentrated”, the review noted. READ ALSO: Nigeria, UAE’s Non-Oil Trade Hit $5bn In 2025 He explained that although the Dangote Refinery may have brought succor to Nigeria, the country still needs a larger downstream reform.
“For Nigeria, this is not an abstract issue. It is one of the most familiar contradictions in the country’s economic history: a major crude oil producer that spent decades importing refined petroleum products, subsidising consumption, losing foreign exchange, weakening domestic value chains and exposing itself to global product-market volatility.” “The Dangote Refinery has changed the structure of Nigeria’s downstream conversation.
It has created a new possibility: that Nigeria could move from being a crude exporter and product importer to a refining, petrochemical and regional supply hub. “But the larger downstream reform agenda is still unfinished. Refining capacity alone will not solve the problem unless it is connected to transparent pricing, logistics, storage, pipelines, competition, regulation, petrochemicals, export strategy, and industrial policy.
Nigeria’s domestic paradox, he noted, although simple, is damaging.