Aradel Holdings Plc has confirmed plans to commence petrol production at its modular refinery in 2027, a move driven by the removal of fuel subsidies that has made manufacturing the product commercially viable for the first time in years.
The announcement signals a significant expansion for the energy company, whose refinery currently produces kerosene, diesel, gas oil, and naphtha. Adding petrol to that product slate positions Aradel to compete directly in Nigeria’s deregulated downstream market, where private refiners now set prices based on market forces rather than government-controlled templates.
Temitayo Ogunbanjo, who manages Aradel’s refinery operations, told Bloomberg in an interview published Thursday that the deregulation of the petroleum downstream sector “has now created a path” to manufacture petrol. The comment reflects a broader industry shift following the subsidy removal, which had previously made petrol refining economically unattractive for smaller operators.
Brandspur Brand News gathered that modular refineries like Aradel’s are compact, skid-mounted processing plants designed for rapid deployment and efficient crude oil refining. Their smaller scale and lower capital requirements have made them an increasingly important part of Nigeria’s strategy to expand domestic refining capacity and reduce dependence on imported fuel.
The development comes as Nigeria’s refining landscape undergoes its most dramatic transformation in decades. The Dangote Petroleum Refinery, with its massive 650,000 barrels-per-day capacity, has already begun reshaping petrol supply dynamics. Yet Heineken Lokpobiri, minister of state for petroleum resources, argued on Wednesday that Africa needs far more refining capacity than even Dangote can provide.
“The Dangote Refinery is not enough. Despite the fact that the refinery is increasing its refining capacity to 1.4 million barrels. But it is not enough for the African continent,” Lokpobiri said, emphasising the scale of demand across the region.
Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority released on July 20 showed that modular refineries including Walter Smith, Edo refinery, and Aradel refinery are already making tangible contributions to domestic fuel supply. The facilities produced approximately 478,000 litres of diesel per day during the month, with 562,000 litres supplied to the domestic market.
The same data revealed that Dangote refinery produced an average of 39.1 million litres of petrol per day during that period, underscoring the vast gap between large-scale and modular refining operations.
Aradel’s entry into petrol production carries particular significance because it demonstrates that smaller refiners can find profitable niches in a market that was once dominated by the Nigerian National Petroleum Company’s import-heavy supply chain. The company’s modular approach allows it to scale operations incrementally, reducing the financial risks associated with large refinery projects.
For Nigerian consumers, the expansion of domestic refining capacity holds the promise of more stable fuel supply and potentially lower prices as competition intensifies. The elimination of subsidy payments has already freed up government resources, while the emergence of multiple private refiners creates a more competitive market structure.
Aradel Holdings has positioned itself as an integrated energy company with interests spanning upstream oil and gas production, refining, and gas processing. The company’s decision to add petrol to its product slate represents a natural evolution of its downstream strategy and aligns with national objectives to achieve fuel self-sufficiency.
The 2027 timeline gives the company sufficient runway to complete necessary plant modifications, secure required regulatory approvals, and align its supply chain for petrol distribution. Industry observers will watch closely to see whether the modular refinery model can deliver petrol at competitive prices while maintaining profitability.
