The Nigerian oil refining sector recorded a significant expansion in the fourth quarter of 2024, marking the first quarterly growth in five years.
According to the recently published Gross Domestic Product (GDP) report by the National Bureau of Statistics (NBS), the sector posted a real GDP growth of 9.59% in Q4 2024.
A trend analysis by Naijaonpoint Research highlights that the last time the oil refining subsector recorded positive growth was in Q4 2018 when it expanded by 33.6%. Since then, the sector has been in persistent contraction due to various structural challenges, including inadequate refining capacity, aging infrastructure, and reliance on imported refined petroleum products.
In nominal terms, the oil refining sector was valued at N20.5 billion in 2024, slightly lower than the N22.8 billion recorded in the previous year.
The revival in the oil refining sector is largely attributed to the commencement of operations at the Dangote Refinery in mid-2024. The 650,000-barrel-per-day facility, recognized as the world’s largest single-train refinery, has begun supplying refined petroleum products both domestically and internationally.
This development has reduced Nigeria’s dependence on imported fuel and is expected to improve the country’s trade balance by curbing foreign exchange demand for fuel imports.
Beyond refining, the broader oil sector sustained growth throughout 2024, recording an annual GDP expansion of 5.54%. This marks a significant rebound from the 2.22% contraction witnessed in 2023.
The sustained growth in Nigeria’s oil refining and upstream sectors presents a positive outlook for the country’s economic diversification efforts.
As the country continues to implement policy reforms and attract investments into the energy sector, the momentum seen in 2024 could lay the foundation for a more resilient and competitive oil industry in the years ahead.