adsAt N525 a share, the Dangote Petroleum Refinery’s proposed initial public offering is asking investors to pay a premium for one of Nigeria’s most consequential industrial assets. The offer values the refinery at about N65.22 trillion, or $47.8 billion, based on 124.23 billion shares. With net debt of about $1.4 billion, enterprise value rises to roughly $49.2 billion. The central investment question is therefore not whether the refinery is strategically important, but whether its future earnings can justify the price investors are being asked to pay today.
At N525, enterprise value is 9.5 times annualised H1 2026 EBITDA of $5.2 billion. Annualised profit after tax of roughly $5 billion implies earnings per share of N40.32 and a P/E ratio of about 13 times. The numbers become more demanding beside international peers. Marathon Petroleum trades at about 8.21 times EV/EBITDA and Valero Energy at 8.50 times, against a cited industry median of 7.52 times. Global comparisons are imperfect, but the premium matters. H1 2026 may also be unusually strong.
Three factors could put pressure on future profitability. First is the refining environment. The Strait of Hormuz crisis pushed Brent above $118 a barrel and helped generate exceptional refining spreads. Such conditions can inflate earnings but are unlikely to last. The US Energy Information Administration forecasts Brent at $87 a barrel in 2026 and $69 in 2027, suggesting margins could moderate as markets normalise. Valuing the refinery on such conditions risks overstating sustainable earnings.
