AEC: Nigeria Must Build Full Refining Value Chain Beyond Fuel Supply
Africa Energy Chamber advises Nigeria to focus on domestic refining to reduce imported product shocks, conserve foreign exchange, support naira stability, and deepen industrial linkages. Chairman NJ Ayuk warns that despite Dangote Refinery's potential to transform supply conditions, Nigeria faces its 'domestic paradox' - a major crude producer that imports refined products from the same resource, draining foreign exchange and weakening domestic value chains for decades.
The AEC emphasizes that successful downstream reform requires more than just refinery capacity. It demands transparent pricing, reliable crude supply, efficient logistics, balanced regulation, and connections to petrochemicals and industrialization. 'Refining should support petrochemicals, aviation fuel, industrial feedstock, plastics, fertiliser, export earnings, and regional energy trade,' Ayuk noted.
Nigeria's opportunity is larger than Angola's due to bigger domestic market, larger population, and established trading networks. However, success depends on execution - whether Nigeria simply replaces imported products with locally refined ones or builds a full value chain around refining, petrochemicals, storage, shipping, exports, and industrial use. 'The country must decide whether refining becomes a platform for industrial scale, not just a solution to fuel scarcity,' Ayuk concluded.