Dangote Takes Control of N14.4 Trillion Nigeria’s Fuel Market as FG Suspends Petrol Imports
- Nigeria's petrol market has experienced shifts as import licences get suspended, placing Dangote Refinery in a dominant position
- Local refining now provides 92% of Nigeria's petrol supply, transforming the country's energy landscape
- However, there are concerns regarding over-reliance on a single supplier, prompting calls for regulatory measures to ensure competition
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
Nigeria’s petrol market is undergoing one of its most dramatic transformations in decades after the federal government suspended the issuance of petrol import licences.
The policy shift has effectively placed the Dangote Petroleum Refinery at the heart of the country’s fuel supply chain, giving the facility a dominant position in a market estimated to be worth about ₦14.4 trillion annually.
Source: UGC
Industry data indicated that the refinery now supplies the overwhelming majority of petrol consumed in the country.
While analysts said the development marked a major milestone for local refining, it has also triggered debate among economists, labour groups, and energy experts over the risks of relying heavily on a single supplier for such a critical commodity.
According to a Punch report, for decades, Nigeria depended largely on imported petrol due to the poor performance of government-owned refineries. The recent policy shift is therefore seen as a turning point in the country’s long-standing struggle to achieve energy independence.
Local refineries now dominate petrol supply
Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) showed that domestic refining now accounts for most of the petrol supplied in Nigeria.
According to the regulator’s February 2026 market fact sheet, local refineries delivered about 36.5 million litres of petrol per day, while imports accounted for only about three million litres daily.
This brings Nigeria’s total petrol supply to roughly 39.5 million litres per day, meaning domestic production now represents about 92 per cent of the country’s supply.
At present, the Dangote refinery remains the only facility producing petrol locally on a large scale. Several smaller modular refineries are operational, but most focus on diesel and related petroleum products rather than petrol.
Using a conservative estimate of ₦1,000 per litre, Nigeria’s daily petrol consumption translates to an annual market value of more than ₦14.4 trillion, making it one of the largest fuel markets in Africa.
Experts warn of market concentration
Despite the progress in domestic refining, some analysts warn that the sudden concentration of supply could create long-term challenges.
Energy economist, Wumi Iledare, described the suspension of petrol imports as a strong policy signal in Nigeria’s downstream oil sector. However, he cautioned that abrupt regulatory shifts can sometimes encourage strategic behaviour among market players.
According to him, such signals could lead to precautionary stockpiling, opportunistic pricing, or competition for logistical advantages within the distribution network.
Iledare stressed that regulators must provide clear guidance and ensure that local refining, distribution infrastructure, and pricing mechanisms are strong enough to consistently meet national demand.
Regulators urged to protect competition
Energy law expert Dayo Ayoade said Nigeria’s heavy reliance on the Dangote refinery reflects structural gaps in refining capacity rather than deliberate market control by the company.
He explained that regulators still have the legal authority under the Petroleum Industry Act to monitor competition and intervene if necessary.
Ayoade noted that if a dominant supplier is found to be abusing its market position, authorities can impose sanctions or corrective measures.
He also expressed optimism that the market could become more competitive as additional refining projects gradually come on stream.
Nigeria: Concerns over energy security
Some industry stakeholders have raised concerns about the potential risks of relying on a single refinery for most of the nation’s fuel supply.
According to Jeremiah Olatide, while the growth of domestic refining is encouraging, a balanced supply structure could offer greater stability.
Olatide suggested that a system where about 70 per cent of petrol demand is met locally and 30 per cent through imports might provide a safer transition for Nigeria’s fuel market while encouraging healthy competition.
He also noted that the restriction on import licences may have accelerated the refinery’s rapid rise to dominance.
Labour, economists call for consumer protection
Labour organisations have also expressed concern over the concentration of supply.
The Nigeria Labour Congress warned that dominance by a single supplier in such a strategic sector could expose consumers to price pressures if regulators fail to maintain strong oversight.
According to the union’s Assistant Secretary-General Christopher Onyeka, competition remains essential in preventing excessive pricing power in any economy.
Economist Aliyu Alias echoed similar concerns, noting that limited participation from other refiners reduces competitive pressure within the downstream sector.
Government defends policy shift
The NMDPRA has defended the decision to suspend petrol import licences, arguing that the move is necessary to consolidate Nigeria’s progress in domestic refining.
The regulator’s chief executive, Saidu Mohammed, said the country must sustain the gains achieved through local fuel production instead of returning to large-scale petrol imports.
According to him, Nigeria’s petroleum sector has evolved through several phases, from early domestic refining to years of heavy reliance on imports after the decline of state-owned refineries.
The emergence of the Dangote refinery, he said, represents a new phase in which local refining has the capacity to meet national fuel demand.
Global oil volatility adds pressure
The transformation of Nigeria’s petrol market is also unfolding amid turbulence in global energy markets.
The International Energy Agency recently announced plans to release 400 million barrels of oil from emergency reserves to ease supply disruptions linked to tensions around the Strait of Hormuz, a key shipping route responsible for nearly 20 per cent of global oil and gas shipments.
Crude oil prices have hovered around $90 per barrel, reflecting ongoing uncertainty in international markets.
Source: Getty Images
Pump prices begin to adjust
Following recent reductions in refinery gantry prices, several filling stations across Nigeria have adjusted retail fuel prices.
Market checks showed petrol selling between ₦1,130 and ₦1,150 per litre at many outlets, although some stations still sell at higher rates depending on supply conditions.
As Nigeria’s downstream sector enters this new phase, industry observers say the long-term success of the policy will depend on how regulators balance support for domestic refining with measures that encourage competition and protect consumers.
Dangote explains fuel prices may remain high
Legit.ng earlier reported that the managing director and chief executive officer of Dangote Petroleum Refinery, David Bird, said petrol prices may not decline even as the refinery operates at full capacity, citing volatility in global oil markets and rising supply chain costs.
Bird made the remarks during a media chat on Monday, March 9, 2026, explaining that the refinery operates within the international commodities market, which directly influences the cost of crude oil and refined products.
According to him, the refinery purchases crude oil at global benchmark prices, including crude sourced locally under the crude-for-naira programme.
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
