THE EFFECT OF DANGOTE REFINERY PRODUCTION ON NIGERIA’S ENERGY OUTPUT, CRUDE OIL IMPORTS, AND REGIONAL FUEL PRICES

Abstract

This study investigates the effect of Dangote Refinery production on Nigeria’s energy output, crude oil imports, and regional fuel prices using time series data from 2020 to 2025. The research employs an autoregressive distributed lag (ARDL) model and ordinary least squares (OLS) regression to estimate the short- and long-term effects of refinery production on key energy sector indicators. The results reveal that increased refinery production has a significant positive impact on national energy output, a strong negative effect on crude oil imports, and a moderate negative influence on regional fuel prices, highlighting its transformative role in Nigeria’s energy sector. Lagged production terms indicate that the effects are cumulative, with sustained operational efficiency enhancing long-term benefits. The findings underscore the importance of domestic refining infrastructure in improving energy security, reducing import dependency, and stabilizing fuel markets in both Nigeria and neighboring regions. Based on the results, the study recommends optimizing refinery capacity, supporting domestic refining investments, enhancing regional distribution networks, implementing price stabilization policies, and promoting continuous monitoring and research. This study contributes to the understanding of large-scale refining infrastructure as a strategic tool for economic and energy sector development in resource-dependent economies.