President Bola Tinubu’s Independence Day speech described Nigeria as having passed through the difficult phase of economic reform and entering an “age of prosperity”.
The energy sector offers perhaps the clearest test of that transition.
Three years after President Bola Tinubu announced the end of petrol subsidy, Nigeria’s energy story looks very different from the one he inherited.
The country has moved from near-total dependence on imported petrol to having a 700,000-barrel-per-day refinery operating at scale. Domestic crude supply to local refiners has improved, the government is restructuring the electricity market and gas production is rising.
But measured by the number that matters to households and businesses, the cost and reliability of energy delivered to them, Nigeria is still a long way from energy security.
Petrol can now be refined at home, yet pump prices have climbed to around N1,400 per litre in Lagos and Abuja and as high as N1,500 in parts of northern Nigeria.
Electricity generation has reached new highs, but businesses still supplement the grid with diesel, gas and solar and Nigeria has 215.19 trillion cubic feet of proven gas reserves while domestic gas delivery remains only about 65 per cent of the allocated obligation.
That is the energy story of Tinubu’s first three years: Nigeria has built more capacity, but has not yet built an energy system capable of delivering that capacity cheaply and reliably.
Nigeria Built A Refinery
The biggest structural change has occurred downstream.
In 2023, Nigeria was still importing most of the petrol consumed by its economy despite being one of the world’s largest crude oil producers. The removal of petrol subsidies changed the economics of that market almost overnight.
The more important development that followed was the emergence of the Dangote refinery.
The 700,000-barrel-per-day facility has become a major source of Nigeria’s refined petroleum products and is now operating at full capacity. Business Metrics reported in September that the refinery was processing 700,000 barrels per day and preparing an IPO to finance further expansion.
The upstream side of the equation has also improved.
NUPRC said 53.7 million barrels of crude were supplied to local refineries between April and June 2026, representing 97.4 per cent performance against the domestic crude supply obligation for the qu
That is a significant change from the early period of the Dangote refinery’s operation, when securing enough Nigerian crude became a recurring problem.
Yet the crude-supply problem has not disappeared.
In July, Dangote began pricing some local fuel sales in dollars, citing difficulty obtaining sufficient crude under the naira-for-crude arrangement.
The refinery said it needed about 13 to 15 crude cargoes each month but was receiving fewer locally and therefore had to source the balance internationally.
Nigeria therefore has a refinery capable of meeting a substantial share of domestic demand, but it is still working to build the crude-supply system needed to keep that refinery fully integrated into the domestic economy.
The Petrol Problem Is No Longer Refining Alone
Nigeria’s growing domestic refining capacity has reduced the country’s dependence on imported petrol, but it has not insulated consumers from rising fuel prices.
According to NMDPR between January and June 2026, domestic refineries supplied about 6.61 billion litres of petrol, compared with approximately 1.87 billion litres from imports. Domestic refineries therefore accounted for roughly 78 per cent of petrol supplied during the period.
Dangote Refinery was responsible for most of that domestic supply. In June alone, the refinery produced an average of 39.1 million litres of petrol per day and supplied 32.5 million litres per day to the domestic market. That accounted for the entire volume of domestically supplied petrol recorded by NMDPRA for the month.
But the July figures showed why refining capacity alone cannot guarantee stable prices or supply.
Domestic petrol supply fell to 25.8 million litres per day in July from 32.5 million litres in June, while imports rose to 19.7 million litres per day, up from 18.1 million litres. Total petrol supply consequently fell to 45.5 million litres per day from 50.6 million litres.
Dangote produced 25.9 million litres of petrol daily in July and supplied 25.8 million litres to the domestic market. Its average refinery utilisation was 71.09 per cent, rather than 100 per cent.
Nigeria has not completely eliminated its dependence on imported petrol. Instead, imports have increasingly become a balancing mechanism when domestic production falls short.
Petrol prices rose to about N1,400 per litre in Lagos and Abuja and as high as N1,500 in parts of northern Nigeria in September, even as the Dangote refinery ramped up production to 700,000 barrels per day.
The development highlights a major limitation in Nigeria’s push for energy independence.
While the Dangote refinery has significantly changed the structure of the downstream petroleum market, the price Nigerians pay at the pump is still influenced by global crude oil prices, exchange-rate movements and transportation costs.
Nigeria Has Gas. Nigeria Still Has A Power Problem.
President Bola Tinubu’s Independence Day speech identified gas as a key part of the next phase of his economic programme.
“We will use our gas to power new industries,” Tinubu said, while outlining his administration’s plan to reduce production costs and create jobs.
“We will support businesses that work to bring factories back to life in our great industrial centres. We will expand digital connectivity into communities that have waited too long to participate in the modern economy. We will invest in the skills employers demand and support Nigerian businesses with the infrastructure and finance they need to grow,” He added.
The data from the gas and electricity sectors, however, shows why that ambition remains difficult to achieve.
Nigeria entered 2026 with 215.19 trillion cubic feet (TCF) of proven gas reserves, comprising 100.21 TCF of associated gas and 114.98 TCF of non-associated gas. NUPRC said the reserves increased by 2.21 per cent from the previous year and represented an estimated gas reserves life of 85 years.
On paper, that gives Nigeria one of the strongest gas positions on the continent, but having gas underground is not the same as having gas available to a power plant.
Between January and June 2026, average domestic gas delivery stood at 2.05 billion cubic feet per day (Bcf/d) against a Domestic Gas Delivery Obligation allocation of 3.16 Bcf/d.
That means only about 65 per cent of the allocated domestic gas requirement was actually delivered.
Of the 27 companies allocated domestic gas obligations, only 23 were actively supplying gas to domestic customers, according to NUPRC. The regulator said the figures showed that expanding the allocation base did not automatically translate into physical delivery.
Nigeria had an unused domestic gas allocation of roughly 1.11 Bcf/d during the period, gas that was expected to support the domestic market but was not delivered.
And this is happening in a country where gas-fired plants provide the backbone of grid electricity.
The problem is not simply production. It is the chain between gas production, processing, transportation, power generation and payment.
NUPRC Chief Executive Officer Oritsemeyiwa Eyesan said in May that Nigeria’s gas and power sectors had operated in silos for years, despite repeated government interventions.
She pointed specifically to the disconnect between upstream producers, infrastructure developers and electricity distributors, saying Nigeria had made limited progress despite its huge gas reserves.
She argued that with 215 TCF of reserves, the country should be discussing how to meet regional energy demand rather than struggling to satisfy domestic requirements.
The electricity data shows the consequence of that disconnect.
NERC’s August 2026 operational data showed that Nigeria had an average 4,758 MW of available generation capacity, with an average load factor of 86 per cent. That meant about 4,102 MW of available capacity was utilised on average.
The figure is well below Nigeria’s installed generation capacity.
NERC’s April data, for example, showed that the country had 13,625 MW of installed capacity, but only 4,286 MW was available for dispatch on average during the month, a plant availability factor of just 31 per cent.
Nigeria has 215.19 TCF of gas reserves, but cannot consistently deliver enough gas to the domestic market.
Nigeria has 13,625 MW of installed generation capacity, but only a fraction is available for dispatch at any given time.
And even when electricity is generated, the distribution system still struggles to turn available power into commercially sustainable electricity.
NERC’s July 2026 commercial data showed that DisCos received electricity worth N333.94 billion but billed customers only N250.79 billion, giving a billing efficiency of 75.10 per cent. Collection efficiency was 81.95 per cent, with N205.53 billion collected during the month.
This helps explain why the government’s energy challenge cannot be solved simply by producing more gas or building more power plants.
The administration itself has acknowledged the financial side of the problem.
In June democracy address, Tinubu said that when his government came into office, the electricity sector was characterised by chronic generation shortfalls, unreliable gas supply, fragile transmission infrastructure and a metering deficit of more than four million.
He said the sector was generating below its 13,500 and MW installed capacity, while transmitting less than it generated and distributing less than it transmitted.
The President also said his administration had authorised a N4 trillion bond programme to settle verified legacy debts owed to power generation and gas companies.
The administration’s own figures also show that generation has improved.
In May, Tinubu said power generation had sometimes peaked at 6,000 MW, about 50 per cent above the level inherited in 2023, while 2.5 million meters had been supplied through the Presidential Metering Initiative.
But the latest NERC figures show why a peak generation number should not be confused with sustained electricity supply.
The average available capacity in August was 4,758 MW, while only about 4,102 MW was utilised.
So the central energy question after three years of reform is no longer simply whether Nigeria has enough resources. It is whether Nigeria can move those resources through the value chain.