Refinery optimization in OPEC member states: An integrated inverse DEA approach and economic viability analysis

Refinery optimization is critical for ensuring energy security and economic resilience in OPEC member states, where persistent inefficiencies and heavy reliance on fuel imports remain major challenges. These issues not only strain foreign exchange reserves but also expose domestic markets to global price volatility. This study applies an integrated inverse data envelopment analysis (IDEA) approach to determine optimal refinery capacity upgrades and throughput adjustments under realistic operational constraints. The methodology is generalizable to OPEC countries and is demonstrated using Nigeria as a case study, given its severe gasoline shortages despite significant investments in refinery expansion. Two model variants were analysed: the unconstrained model, which suggested impractical capacity upgrades, and the constrained model, which produced feasible adjustments after accounting for gasoline demand shortages. Results indicate that optimized domestic refining could supply approximately 285 thousand barrels of gasoline daily, meeting 81.7% of national demand, while fully satisfying distillate requirements. However, kerosene refining remains economically unsustainable under current market conditions. Complementing the technical analysis, an economic viability assessment shows that gasoline and distillate refining offer highly attractive returns, with payback periods of less than one year, reinforcing the importance of prioritizing these products. Policy implications include adopting data-driven capacity planning across OPEC, implementing selective product prioritization, and channelling investments toward economically viable refinery upgrades to reduce import dependence, stabilize fuel prices, and strengthen energy security. The proposed framework provides a practical decision-making tool for governments and industry stakeholders seeking to enhance refining efficiency and resilience in volatile energy markets.