Otedola projects stronger naira as Dangote refinery hits full capacity

Femi Otedola, chairperson of First HoldCo Plc, has expressed optimism that the naira could strengthen significantly following the Dangote Petroleum Refinery’s announcement that it has reached its full operational capacity of 650,000 barrels per day (bpd).

In a statement on Thursday via his official X page, Mr Otedola congratulated the President and Chief Executive of Dangote Group, Aliko Dangote, describing the milestone as a defining moment for Nigeria’s energy sector and broader economy.

“With domestic refining now firmly underway after decades of reliance on imports, pressure on the foreign exchange market should ease significantly. I am optimistic that the naira will strengthen meaningfully, and trading below ₦1,000/$1 before year-end is increasingly within reach,” the billionaire businessman wrote.

The naira has recently traded around ₦1,350 per dollar in the official market.

Mr Otedola’s comments came less than 24 hours after the refinery announced on Wednesday that its Crude Distillation Unit (CDU) and Motor Spirit (MS) Block had reached the full nameplate capacity of 650,000 bpd.

The company said it achieved the milestone after fully restoring and optimising the CDU and MS production block following a scheduled maintenance exercise.

According to the refinery, the CDU and MS Block—comprising the naphtha hydrotreater, isomerisation unit and reformer unit—are now operating steadily at full capacity.

During the recent festive period, the refinery supplied between 45 and 50 million litres of Premium Motor Spirit (PMS) daily, far below its refining capacity and professed targets to Nigerians.

With the CDU and MS Block now fully restored, it said it is positioned to deliver up to 75 million litres of PMS daily to the domestic market as required.

Dangote and Forex relief

The development signals a significant shift in Nigeria’s long-standing dependence on imported refined petroleum products, particularly petrol.

For decades, Africa’s largest crude oil producer relied heavily on fuel imports to meet domestic demand, placing sustained pressure on foreign reserves and contributing to exchange rate volatility.

Analysts say improved domestic refining could conserve billions of dollars previously spent on imports, ease demand for foreign exchange, improve energy security and support macroeconomic stability.

Economists have argued that reduced demand for foreign exchange for fuel imports could help stabilise the naira, which has faced persistent depreciation pressures in recent years.

However, a January report by Kpler, a global energy analytics firm, had projected that the refinery’s operational outlook for the first half of 2026 remained uncertain due to persistent challenges with its Residual Fluid Catalytic Cracking (RFCC) unit, which caps crude processing rates and gasoline output.

The report indicated that the restart of the 200,000 bpd RFCC unit had been pushed to 10 February and could face further delays following repeated outages since April last year.

READ ALSO: Dangote Refinery not importing petrol – CEO

$12bn expansion underway

Beyond the current milestone, Mr Otedola disclosed that the Dangote Group has embarked on an additional $12 billion expansion project to increase refining capacity to 1.4 million bpd.

The expansion will also include annual production of 2.4 million metric tonnes of polypropylene and 400,000 metric tonnes of Linear Alkyl Benzene—key raw materials for plastics and detergent manufacturing.

“Aliko is not stopping here. He has embarked on an additional $12 billion expansion to increase refining capacity to 1.4 million barrels per day, alongside 2.4 million tons of polypropylene and 400,000 metric tons of Linear Alkyl Benzene for detergent production. Work has already commenced in earnest,” Mr Otedola said.

He described the development as transformational for Nigeria and Africa, noting that supplying up to 75 million litres of PMS daily could significantly reshape Nigeria’s energy narrative and conserve foreign exchange.