A New Era for Nigeria’s Downstream FX Market

From financing imports to funding domestic refining

Nigeria’s downstream petroleum market is undergoing a structural transformation driven by Dangote Refinery’s expansion. At an estimated throughput of 700,000 barrels per day, the refinery is projected to produce 46.75 million litres of PMS daily, meeting about 87% of Nigeria’s estimated demand, while generating exportable surpluses of diesel and aviation fuel.

The refinery has already reshaped Nigeria’s external sector. Refined petroleum export earnings increased from $270 million in Q1 2025 to $2.37 billion in Q1 2026, while the PMS import bill declined from $18.09 billion in 2022 to $6.83 billion in 2025, reflecting the growing impact of domestic refining.

Although Dangote Refinery has resumed naira-denominated sales under the crude-for-naira arrangement, its temporary adoption of U.S. dollar pricing showed that domestic marketers could have required about $62.7 million
daily to purchase refined products. However, this would have represented a gross downstream foreign exchange requirement, largely replacing foreign exchange previously used for fuel imports, with rising export earnings
helping to offset the impact.

Download full report: Dangote Refinery and Nigeria’s FX Market