Concerns over a possible monopoly in Nigeria’s downstream petroleum sector are growing after the suspension of petrol imports left the Dangote Refinery controlling the bulk of the country’s estimated N14.4tn petrol market.
Stakeholders, including energy experts, economists and labour leaders, have called for stronger regulatory oversight and increased competition as the refinery takes a dominant position in the nation’s fuel supply chain.
On Wednesday, Frontline Reporters reported that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) confirmed it had not issued any petrol import licences this year, citing sufficient domestic supply.
Data released by the regulator shows that the Dangote Refinery accounted for about 92 per cent of Nigeria’s daily petrol supply in February 2026, following the suspension of imports.
According to the agency’s February 2026 fact sheet, local refineries supplied 36.5 million litres of petrol per day, while imports contributed just three million litres daily, bringing total national supply to 39.5 million litres per day.
With petrol selling at around N1,000 per litre, Nigeria’s petrol consumption translates to an annual market value exceeding N14.4 trillion, although the figure fluctuates with global crude oil prices.
Currently, the Dangote refinery remains the only facility producing petrol in Nigeria, while other modular refineries focus mainly on diesel production.
Calls for Competition, Stronger Regulation
The government’s decision to halt petrol import licences has sparked mixed reactions across the energy sector.
An energy expert, Professor Emeritus Wumi Iledare, described the development as a major policy shift but warned it could encourage speculation and attempts by market players to consolidate power.
He noted that regulatory signals can sometimes trigger strategic positioning in emerging markets, leading to stockpiling, opportunistic pricing or logistical advantages among suppliers.
“The announcement signals a transition in Nigeria’s downstream market, but it also risks triggering market speculation if not properly managed,” Iledare said.
Another energy expert, Professor Dayo Ayoade, stressed that the regulator must ensure competition remains active in the sector, as provided under the Petroleum Industry Act.
He explained that Nigeria’s heavy reliance on Dangote’s refinery reflects structural weaknesses in the country’s refining capacity rather than deliberate market dominance.
“The reality is that we don’t have functional refineries under the Nigerian National Petroleum Company Limited at the moment, which is why the country depends largely on Dangote’s output,” he said.
Ayoade added that regulators still have the authority to sanction any abuse of market dominance if it occurs.
Supply Risk Concerns
Industry analysts have also raised concerns about the risks of depending on a single refinery for the majority of Nigeria’s petrol supply.
The Chief Executive Officer of petroleumprice.ng, Jeremiah Olatide, warned that such heavy reliance could expose the country to major supply disruptions if production challenges arise.
According to him, the refinery currently supplies close to 50 million litres of petrol daily, accounting for roughly 90 per cent of Nigeria’s consumption.
Olatide suggested a more balanced structure combining local refining and imports to protect energy security.
“A 70–30 balance between local refining and imports would provide stronger energy security for Nigeria,” he said, warning that excessive dependence on a single supplier could trigger supply and economic risks.
Labour Demands Price Regulation
The Nigeria Labour Congress (NLC) has also raised concerns about the implications of a single supplier dominating such a critical sector.
Assistant Secretary-General Christopher Onyeka warned that monopolies could expose consumers to price exploitation if not carefully regulated.
“Monopoly is not good for any economy. When one supplier controls a product as critical as petrol, there is a risk of price manipulation,” Onyeka said.
He urged the government to consider temporary price regulation while also accelerating efforts to revive public refineries and encourage new private-sector investments.
Economists Reject Price Controls
However, some economists have cautioned against returning to price regulation or subsidy regimes.
Dr Ayo Teriba, Chief Executive Officer of Economic Associates, warned that reacting to short-term global crises with long-term policy changes could distort the market.
Similarly, Dr Muda Yusuf, Director of the Centre for the Promotion of Private Enterprise, argued that price controls could create economic distortions and discourage investment in the refining sector.
Both experts instead urged the government to reduce regulatory charges on refiners and encourage the establishment of additional refineries to foster competition.
NMDPRA Defends Import Suspension
Meanwhile, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Saidu Mohammed, defended the decision to halt petrol import licences, saying Nigeria must consolidate gains made in domestic refining.
Speaking during a courtesy visit by Frontline Reporters at the agency’s Abuja headquarters, Mohammed said some interests were still pushing for the continuation of large-scale fuel imports despite the progress made in local refining.
“Today we have a refinery that meets our requirements, but there are still people who want Nigeria to remain dependent on imports,” he said.
According to him, Nigeria’s petroleum sector has moved through several phases—from early domestic refining to heavy reliance on imports following the collapse of state-owned refineries.
He stressed that the country must sustain the current transition toward domestic refining to ensure long-term energy security.
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