The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has described 2025 as a defining year for Nigeria’s petroleum sector, marked by regulatory reforms, refinery development initiatives, pricing realignments, leadership changes, and heightened competition in the downstream market.
In its comprehensive review of the sector, PETROAN assessed performance in 2025 and outlined prospects for 2026, with emphasis on supply security, affordability, sustainability, and investor confidence.
PETROAN noted that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) sustained approvals for private refinery projects in 2025. Since the Petroleum Industry Act (PIA) came into effect, over 30 refinery licences mostly modular and medium-scale have been issued, with about 23 projects currently under development.
When completed, these refineries are expected to add more than 850,000 barrels per day to Nigeria’s domestic refining capacity, complementing the Dangote Petroleum Refinery and significantly reducing dependence on imported petroleum products.
The association highlighted the introduction of the Naira-for-Crude policy as a major intervention aimed at easing pressure on foreign exchange and supporting domestic refining. In 2025, an estimated 250,000 to 300,000 barrels of crude oil per day were allocated to local refineries under the scheme.
According to PETROAN, the policy helped reduce foreign exchange demand, encouraged private refinery participation, and offered a framework for better price stability. However, its impact was limited by implementation gaps, pricing disputes, supply constraints, and inconsistent crude allocations.
PETROAN stressed that strengthening transparency, ensuring timely allocations, and aligning pricing mechanisms with global benchmarks will be critical to maximizing the policy’s benefits in 2026.
The downstream sector witnessed intense price competition between petroleum importers and local refiners in 2025. PETROAN said frequent pump price adjustments triggered by price wars resulted in market uncertainty and billions of naira in losses for retail outlet operators. While consumers enjoyed short-term relief, the association warned that sustained price instability undermined long-term investment confidence.
Nigeria recorded a modest recovery in crude oil production during the year, averaging between 1.3 and 1.5 million barrels per day, including condensates. PETROAN attributed the improvement to enhanced security measures, pipeline surveillance, and partial restoration of shut-in assets.
Despite the gains, production remained below Nigeria’s OPEC quota of about 1.7–1.8 million barrels per day due to persistent oil theft, aging infrastructure, operational inefficiencies, and limited upstream investment.
PETROAN expressed concern over the indefinite shutdown of the Port Harcourt Refinery on May 24, 2025, following operational and mechanical challenges that prevented sustained commercial production despite extensive rehabilitation efforts.
The association noted that the shutdown has constrained domestic refining capacity, increased reliance on imports, intensified pressure on foreign exchange, and worsened pump price volatility, while also creating hardship for host communities. PETROAN welcomed NNPCL’s plan to seek equity partnerships with private investors but emphasized the need for a transparent framework and credible investor engagement to restore confidence.
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The association drew attention to ongoing investigations into the rehabilitation of Nigeria’s state-owned refineries, where an estimated ₦11.35 trillion has reportedly been spent over the years with little operational output. Approved contracts reportedly included $1.5 billion for the Port Harcourt Refinery and $1.48 billion for the Warri and Kaduna refineries combined.
PETROAN called for full forensic audits, transparent tracking of funds, and strict accountability measures to prevent further waste of public resources.
PETROAN acknowledged the appointment of Bashir Bayo Ojulari as Group Chief Executive Officer of NNPC Ltd. in April 2025, alongside a reconstituted board chaired by Ahmadu Musa Kida. The association said the leadership change brought renewed emphasis on commercial performance, transparency, and stakeholder engagement.
Similarly, the appointment of Engineer Saidu Aliyu Mohammed as Chief Executive Officer of NMDPRA in December 2025 was described as a positive step toward strengthening regulatory oversight, compliance, and investor confidence in the downstream sector.
The association observed intensified rivalry between petroleum importers and domestic refiners in 2025 over pricing, crude access, and market share. While importation helped meet immediate supply needs and stabilize prices in the short term, PETROAN warned that over-reliance on imports weakens domestic refining, strains foreign exchange reserves, and heightens inflationary pressures.
PETROAN advocated a balanced approach that combines strategic importation with accelerated development of domestic refining capacity.
While stakeholder engagement improved modestly in 2025, PETROAN noted persistent disputes involving the Dangote Group and key stakeholders, including labour unions and regulators. The association stressed the need for structured, continuous engagement to resolve conflicts, protect workers’ interests, and ensure sector stability.
Looking ahead, PETROAN expressed cautious optimism that 2026 would see improved petroleum product availability as more refineries come on stream and import coordination improves. The association noted that affordability would depend on exchange rate stability, consistent crude supply, and balanced regulation.
PETROAN also projected increased adoption of alternative energy sources such as CNG, LPG, and renewables, while emphasizing that petroleum pricing will remain a major driver of inflation trends in the coming year.
To stabilize the sector and promote long-term growth, PETROAN recommended, among other measures, the privatization of national refineries, consistent crude supply to local refiners, retention of an import window to ensure supply continuity, fair pricing competition, enhanced upstream security, transparent crude allocation, and continuous stakeholder engagement.
The association also called for forensic audits of refinery rehabilitation projects and increased support for alternative energy and sustainable practices.
PETROAN concluded that Nigeria’s petroleum sector in 2025 reflected cautious recovery amid persistent structural challenges. It noted that with improving crude oil production, expanding refinery approvals, and ongoing regulatory reforms, 2026 presents an opportunity to consolidate gains, stabilize prices, and strengthen energy security provided policies remain transparent, inclusive, and investor-friendly.
The review was jointly signed by Dr Joseph Obele, National Public Relations Officer of PETROAN, and Dr Billy Gillis-Harry, National President of the association.
