Why Nigeria’s New Refining Capacity Hasn’t Made Diesel Cheaper for Factories

Nigeria’s expanding refining capacity has strengthened domestic fuel supply, but it has not automatically lowered the cost of diesel for businesses. The national median wholesale depot price for Automotive Gas Oil (AGO) was ₦1,698 per litre on November 12, 2026. Factory-gate costs can be higher once haulage, handling, storage and financing are included. The Dangote refinery has a stated capacity of 700,000 barrels per day, but capacity is not the same as actual output or fuel delivered to Nigerian buyers. September figures reported by the downstream regulator showed average exports of 54.63 million litres per day of petrol, diesel and aviation fuel combined, compared with domestic supplies of 39.98 million litres across those products. The figures do not show that diesel exports alone exceeded domestic deliveries. Domestic diesel prices also depend on reliable crude supply, procurement costs, refinery operations and competition. Reports in 2026 described concerns about crude allocations and the refinery’s use of alternative feedstock sources. Meanwhile, manufacturers that rely on generators face additional costs from diesel, transport and the working capital needed to maintain fuel stocks. For factories, the practical measure is the delivered cost per litre—not just the depot price. Tracking fuel use per unit of output, comparing supplier and route costs, and monitoring actual crude intake and domestic deliveries can help show whether expanding refining capacity is translating into more affordable, reliable energy for industry.

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