Concerns Grow Over Monopoly as Dangote Takes Hold of N14.4tn Petrol Market

Stakeholders, including energy experts, economists, and labour representatives, have expressed concern over the Federal Government’s suspension of petrol imports, urging authorities to consider urgent price regulation as the Dangote Petroleum Refinery assumes a dominant position in Nigeria’s N14.4tn petrol market. The development signals a major shift in the country’s energy landscape.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority recently confirmed that no petrol import licences have been issued this year, explaining that imports were no longer necessary as local production now meets national demand.

Data released by the regulator showed that the Dangote refinery supplied about 92 per cent of Nigeria’s daily petrol consumption in February, following the halt in imports.

According to the agency’s February 2026 fact sheet, local refineries supplied about 36.5 million litres of petrol daily during the month, while imports accounted for roughly three million litres per day. This brought the total daily supply to 39.5 million litres, with domestic refining providing around 92 per cent of the volume a significant departure from Nigeria’s long-standing dependence on imported fuel. The figures also reflect a sharp decline in imports compared to the previous month.

At present, the Dangote refinery is the only facility producing petrol in the country, while other modular refineries focus mainly on diesel production. Using an estimated petrol price of N1,000 per litre and a daily consumption of 39.5 million litres, the Nigerian petrol market is valued at more than N14.4tn annually, although the value may fluctuate depending on global crude oil prices.

The regulator’s confirmation that petrol imports have been suspended because domestic production can meet demand has triggered mixed reactions among industry stakeholders.

Meanwhile, the Minister of Finance, Wale Edun, said the government would not interfere with market-based pricing of petroleum products, stressing that intervention would only be considered as a last resort.

He stated that rather than reversing reforms, the government would explore other measures to ease the cost-of-living pressures on Nigerians without returning to price controls.

Energy expert Professor Emeritus Wumi Iledare noted that while the policy signals a shift toward domestic refining, it could also encourage speculation among market players. According to him, participants in a transitioning market may reposition themselves to gain advantages in supply, logistics, or pricing.

He explained that such behaviour could involve precautionary stockpiling, opportunistic pricing strategies, or efforts to secure greater control over distribution networks.

Iledare also observed that the drop in imports alongside a reduction in total petrol supply suggests the market is still adjusting to a new equilibrium between domestic refining capacity, inventory management, and distribution infrastructure.

For the policy to succeed, he said, regulators must provide clear communication and ensure reliable supply mechanisms that sustain national demand.

Another energy scholar, Professor Dayo Ayoade, said the regulator is best positioned to determine whether the country has sufficient petrol supply. He added that the agency must ensure Nigeria does not rely on costly imports when domestic refining can meet demand.

However, he cautioned that regulators must also guard against potential supply disruptions if the Dangote refinery experiences operational challenges.

According to Ayoade, Nigeria’s heavy reliance on the refinery reflects structural weaknesses in the country’s refining sector rather than deliberate market dominance by the operator.

He stressed that the responsibility lies with regulators to ensure transparency in pricing and to prevent potential exploitation of market power. He added that authorities have the legal powers under the Petroleum Industry Act to penalise any abuse of market dominance if it occurs.

Ayoade expressed optimism that competition would gradually increase as additional refineries become operational.

Similarly, the Chief Executive Officer of petroleumprice.ng, Jeremiah Olatide, warned that relying heavily on a single refinery for petrol supply could expose the country to supply shocks.

He noted that the refinery currently supplies around 50 million litres of petrol daily, accounting for roughly 90 per cent of Nigeria’s estimated consumption. While acknowledging the progress made in boosting local refining, he warned that such concentration creates significant energy security risks.

Olatide suggested that a more balanced supply structure combining local refining and imports would strengthen national energy security. In his view, a ratio of about 70 per cent local supply and 30 per cent imports would provide a safer balance.

He also criticised restrictions on petrol import licences, arguing that the policy artificially boosted the refinery’s market share. While supporting local refining, he said market competition should be allowed to develop naturally, noting that competitive pricing combined with access to crude oil in naira could gradually eliminate the need for imports.

Nigeria has struggled for decades with fuel supply challenges due to the poor performance of state-owned refineries in Port Harcourt, Warri, and Kaduna, which forced the country to depend heavily on imported petrol.

However, the commissioning of the 650,000-barrel-per-day Dangote refinery in Lagos has significantly reshaped the downstream petroleum sector by increasing domestic refining capacity and reducing reliance on imports.

Amid the shift, calls for government intervention are growing. The Nigeria Labour Congress warned that the dominance of a single supplier in such a critical sector could expose consumers to price exploitation if left unchecked.

The labour union argued that monopolies are harmful to economic stability and called for temporary price regulation to protect consumers.

According to the union, government engagement with the refinery operator could help establish a controlled pricing framework while other policy measures such as reducing taxes and levies on petroleum products could help lower pump prices.

Labour leaders also urged the government to revive public refineries and support other private refiners to encourage competition in the sector.

Economist Aliyu Alias similarly warned that Nigeria risks drifting into a market structure where a single supplier largely determines petrol prices due to the absence of strong competition.

He explained that even though recent price reductions have been welcomed by consumers, market dominance allows suppliers to adjust prices at their discretion.

Alias urged the government to accelerate efforts to restore domestic refining capacity to ensure multiple suppliers compete in the market.

Members of the organised private sector also weighed in on the debate. Some economists advised the government to avoid returning to price controls or subsidy regimes, warning that such policies could reverse reforms introduced after the removal of petrol subsidies.

Instead, they suggested temporary relief measures to ease the burden on citizens without distorting market mechanisms.

The Chief Executive Officer of Economic Associates, Dr Ayo Teriba, cautioned against making long-term policy decisions in response to short-term global shocks. He recommended temporary interventions, such as transport subsidies or targeted relief programmes, to cushion the impact of rising fuel prices.

Similarly, the Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, argued that price control could create distortions in the economy. Rather than regulating prices, he suggested reducing regulatory charges and operational costs faced by refiners and fuel suppliers.

Industry stakeholders also stressed the need for additional refineries to increase competition and stabilise the market over time.

Meanwhile, the head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority warned against attempts to push Nigeria back into an era of heavy petrol importation.

He explained that the country had moved through different phases in its petroleum sector from early domestic refining to heavy dependence on imports after state-owned refineries collapsed.

According to him, Nigeria is now entering a new phase driven by increased domestic refining capacity, and the focus should be on sustaining those gains.

He noted that the country once relied almost entirely on imported fuel, leading to the establishment of over 200 tank farms along the coastline to support import operations.

However, with the emergence of large-scale local refining, the government aims to maintain progress toward self-sufficiency in petrol supply.

Meanwhile, the International Energy Agency announced that its member countries would release 400 million barrels of oil from emergency reserves to stabilise global markets disrupted by tensions in the Middle East.

The coordinated release, the largest in the agency’s history, aims to reduce pressure on global oil supply chains amid disruptions linked to the conflict and the closure of key shipping routes.

The Strait of Hormuz, which carries roughly 20 per cent of the world’s oil and gas supplies, has been significantly affected by the crisis, contributing to volatility in crude oil prices.

Oil prices hovered around $90 per barrel on Wednesday as global markets reacted to the developments.

Following a recent reduction in petrol gantry prices by N100, some filling stations adjusted pump prices, selling petrol between N1,130 and N1,150 per litre, although a few outlets continued to sell at higher rates.