Economics of Modular Refineries and Energy Security in Nigeria

Gogo; Ibeinmo Ruth; Ewubare; Dennis Brown; Isukul Araniyar Chinedu

doi:10.56201/wjimt.v10.no10.2026.pg233.242

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Economics of Modular Refineries and Energy Security in Nigeria

Gogo, Ibeinmo Ruth, Ewubare, Dennis Brown , Isukul Araniyar Chinedu

Abstract

This research examines the economics of modular refineries and their implications for energy security in Nigeria using annual time-series observations for 2000–2025. It assesses changes in import dependency. The explanatory variables were, import substitution, domestic refining capacity, foreign exchange savings and employment creation. The Augmented Dickey-Fuller tests indicated that the variables were stationary in levels, I(0). On that basis, the study estimated the relationships with an OLS multiple-regression framework and applied Newey- West robust standard errors to address serial-correlation and heteroskedasticity concerns. The results indicate a very high explanatory fit for the model. The analysis recorded an R2 of 0.993 and an F-statistic of 767.96, with domestic refining capacity, foreign-exchange savings and employment value-addition associated with lower import dependency. The findings further revealed that Import Substitution, Foreign Exchange Saving, Employment value added and Domestic Refining Capacity significantly impact import dependency given their probability values. The study therefore, recommends the expansion of private refining facilities as an important development within Nigeria's downstream sector, while emphasizing the need for clear and transparent institutional arrangements under the Petroleum Industry Act. Key words: Modular Refinery, Energy Security, Import Dependency, Import Substitution, Domestic Refining Capacity, Foreign Exchange Savings

Keywords

Modular RefineryEnergy SecurityImport DependencyImport SubstitutionDomestic Refining CapacityForeign Exchange Savings

References

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Economics of Modular Refineries and Energy Security in Nigeria

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