The Nigerian Downstream Oil & Gas Industry (‘the Industry’) plays a vital role in the national economy, encompassing refining, distribution, marketing, and retailing of key petroleum products such as Premium Motor Spirit (PMS), Household Kerosene (HHK), Automotive Gas Oil (AGO), Aviation Turbine Kerosene (ATK), and Liquefied Petroleum Gas (LPG). In 2024, the Industry underwent a significant transition to a full price-reflective regime for PMS, marking a transformative reform. The removal of petrol subsidies is expected to save the Federal Government over ₦6 trillion annually, enabling redirection of funds to more productive economic sectors.
Further strengthening the Industry’s prospects was the commencement of commercial operations at the Dangote Refinery and Petrochemical Complex, with a 650,000 barrels-per-day capacity. This development positions Nigeria to become a net exporter of refined petroleum products and the largest crude oil refining hub in Africa within the next two to three years.
In 2024, selected industry operators recorded a 55% year-on-year increase in turnover, reaching ₦3.3 trillion. This growth reflected the positive effects of price deregulation and higher sales volumes. Financial performance indicators showed satisfactory cash flow, adequate working capital, and moderate leverage among these operators. Looking ahead, improved profitability and stronger cash flows are anticipated owing to favourable petrol pricing reforms, supporting operators’ ability to meet debt servicing obligations reliably.
Nonetheless, the Downstream Industry remains vulnerable to broader macroeconomic challenges, which could pose significant risks to future performance. Careful monitoring of these external factors will be crucial to sustaining growth in this evolving market.
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