What's Happening?
Nigeria's daily consumption of Premium Motor Spirit (PMS) has increased to 52.9 million liters, surpassing the 2025 benchmark demand of 50 million liters. This rise is attributed to low supply in previous months, stock rebuilding for the festive season,
and additional imports by the Nigerian National Petroleum Corporation (NNPC). Despite efforts to reduce fuel import bills, domestic refineries remain largely inactive, with Port Harcourt, Warri, and Kaduna refineries shut down. However, modular refineries are operating at healthy utilization rates, contributing modestly to domestic capacity. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has issued new licenses for refinery projects, indicating a strategic shift towards enhancing domestic production and energy security.
Why It's Important?
The increase in petrol consumption and the strategic focus on gas and modular refineries highlight Nigeria's ongoing energy transition. This shift is crucial for reducing dependency on fuel imports and stabilizing the domestic energy market. The emphasis on gas as a transition fuel and export commodity underscores its role in supporting Nigeria's power and industrial sectors. The regulatory push for modular refineries and gas infrastructure development aims to create jobs, improve safety, and enhance economic stability. However, the rising fuel prices, exacerbated by subsidy removal, pose a challenge to consumers, impacting the cost of living in Africa's largest economy.
What's Next?
Nigeria's energy sector is poised for further transformation as new refinery projects come online and gas infrastructure expands. The NMDPRA's efforts to attract investment and promote domestic production are expected to continue, potentially leading to increased energy security and economic growth. Stakeholders, including investors and policymakers, are encouraged to support these initiatives to secure a sustainable energy future for Nigeria. The ongoing development of gas and modular refineries will likely play a pivotal role in achieving these goals, while addressing the challenges posed by high fuel prices and limited domestic refining capacity.
