Dangote Refinery Faces Fresh Competition as 7 New Refineries Prepare to Begin Operations

• Seven modular refineries could add 83,000 barrels per day to Nigeria’s capacity when they begin operations in 2027
• New plants may strengthen local fuel supply, while the 700,000 bpd Dangote refinery continues to produce petrol
• Higher petrol prices have weakened Nigerian demand, while growing West African refining capacity challenges European fuel imports

Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.

Nigeria's petroleum refining industry is heading for another major transformation as seven new modular refineries prepare to commence operations in 2027, potentially challenging the growing dominance of the Dangote Petroleum Refinery.

The proposed facilities are expected to add a combined 83,000 barrels per day (bpd) to Nigeria's refining capacity, strengthening domestic fuel production and potentially reducing dependence on imported petroleum products.

George Maher-Bonnett of Argus Media disclosed this during the OTL Africa Downstream Conference in Lagos on Wednesday, October 28, 2026.

Seven new refineries target 2027 operations

Presenting the African Energy Outlook, Maher-Bonnett revealed that Nigeria had four operational modular refineries in September, with a combined processing capacity of 32,000 barrels daily.

According to him, seven additional facilities are scheduled to commence operations next year, bringing substantial new capacity into the domestic refining market.

The proposed 83,000 bpd capacity represents more than two and a half times the combined capacity of the four existing modular refineries.

If all seven facilities become operational, Nigeria's combined modular refining capacity could reach 115,000 barrels daily.

However, the presentation did not identify the proposed refineries, their owners, locations or individual production capacities.

Their commissioning timelines also remain unclear, leaving questions about whether all seven projects will begin production as projected.

Dangote refinery strengthens Nigeria's fuel supply

Despite the expected arrival of new competitors, Maher-Bonnett acknowledged the significant contribution of the Dangote Petroleum Refinery to Nigeria's improving fuel self-sufficiency.

He disclosed that the Lekki-based refinery, described in his presentation as having a capacity of 700,000 bpd, was operating at a high rate, with steady petrol production.

The development has strengthened domestic fuel availability while reducing the commercial attractiveness of importing certain petroleum products from Europe.

However, the proposed modular facilities remain considerably smaller than Dangote's refinery, suggesting their immediate impact may be greater in regional supply than direct competition.

Higher petrol prices weaken Nigerian demand

Maher-Bonnett also revealed that Nigeria's petroleum products consumption had declined in 2026, attributing the development largely to elevated fuel prices.

According to the presentation, government intervention in the market remained limited, apart from a price reduction implemented by the Nigerian National Petroleum Company Limited during October.

The decline in consumption highlights the challenges facing refiners and marketers as consumers adjust their spending to higher energy costs.

African refineries challenge European fuel imports

Beyond Nigeria, Maher-Bonnett highlighted Ghana's expanding refining capacity, particularly the 45,000 bpd Tema refinery, which is increasing production, Punch reported.

He explained that growing refining capacity across West Africa was weakening the economics of shipping petroleum products from Europe into the region.

Higher freight costs have further reduced the competitiveness of European fuel shipments.

For Nigeria, the expected addition of seven modular refineries could deepen domestic refining capacity, encourage competition and improve fuel supply.

However, whether the expansion translates into lower pump prices will depend on production costs, crude oil availability, market conditions and the successful commissioning of the proposed facilities.

Petroleum Institute Completes Modular Refinery

Legit.ng previously reported that the Petroleum Training Institute (PTI), under the Federal Ministry of Petroleum Resources, has completed its modular refinery and plans to increase its capacity for commercial use.

According to a Punch report, PTI, based in Effurun, Delta State, also reportedly teaches artisanal refiners the abilities necessary for processing crude oil.