NNPC Accuses Dangote Oil Refinery of Market Monopolization
The Nigerian National Petroleum Corporation (NNPC Ltd) has made allegations against Dangote Oil Refinery, claiming the latter is attempting to dominate Nigeria’s fuel market through a lawsuit that challenges the fuel import licenses of its competitors.
In its court filings, the national oil company stressed that granting Dangote’s request to either revoke or limit these import licenses would harm market competition and could lead to supply disruptions. Such actions could also affect price stability and pose risks to national energy security.
Legal Dispute in the Federal High Court
This position was articulated in a draft defense submitted to the Federal High Court in Lagos, responding to a lawsuit initiated by Dangote Oil Refinery against the Attorney General of Nigeria. The legal conflict has prompted the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to seek permission to join the proceedings, as reported by Reuters.
Escalation of Fuel Market Tensions
The legal actions unfolded less than a month after Dangote Petroleum Refinery filed a lawsuit requesting that the Attorney General cancel fuel import licenses granted to various oil marketers, including the NNPC. This litigation not only escalates tensions surrounding Nigeria’s fuel import policy but also raises questions about the market influence of Dangote’s refinery, which boasts a capacity of 650,000 barrels per day.
The timing of this dispute is critical, occurring just before Dangote refinery’s planned initial public offering (IPO) in September, which heightens concerns regarding market regulation, competition, and the refinery’s potential earnings.
Arguments over Local Refining Efforts
In its lawsuit, Dangote has contended that the licenses issued to competing distributors undermine local refining initiatives and violate provisions in the Petroleum Industry Act (PIA) designed to boost domestic refining capacity. Conversely, the NNPC has refuted this assertion, maintaining that the law supports the issuance of import licenses to companies holding local refining licenses or those with established histories in trading crude oil and petroleum products.
The national oil company further explained that regulatory authority remains intact, allowing the NMDPRA to manage fuel imports in line with Nigeria’s backward integration policy. NNPC clarified that a complete ban on fuel imports would only be imposed once local production adequately meets domestic demand.
Claims Regarding Fuel Needs and Market Competition
Court documents indicate that the NNPC has challenged the credibility of Dangote’s claims, asserting that the refinery has not provided “credible, independent, or verifiable evidence” to demonstrate its capability to consistently meet Nigeria’s total fuel requirements and ensure a stable supply nationwide. In light of ongoing court proceedings, Dangote Refinery has opted not to comment on the matter, while NNPC has also denied accusations that it intentionally disrupted the refinery’s operations or withheld crude oil supplies.
The NNPC underlined that crude oil allocation decisions are influenced by various factors including operational, commercial, security, and logistical considerations. In response to Dangote’s lawsuit, fuel market stakeholders have voiced their opposition, warning that limitations on import permits could diminish competition and jeopardize the security of fuel supplies throughout Nigeria.
Background of Tensions Between Dangote and NMDPRA
Since commencing operations in 2024, Dangote refinery has continually encouraged local distributors to prioritize sourcing petroleum products from domestic refineries instead of relying on imports. However, this approach has met resistance from the former leadership of the NMDPRA, led by Farooq Ahmed, who argued against creating a market monopoly, emphasizing that such an outcome would undermine competition and threaten Nigeria’s long-term energy security. This impasse has also led to personal disputes between Aliko Dangote and Ahmed, including accusations of corruption and misconduct levied by Dangote against the former regulator.
Previous Legal Challenges and Market Dynamics
In a prior lawsuit filed in 2024 (case number FHC/ABJ/CS/1324/2024), Dangote Refinery sought N100 billion in damages from the NMDPRA, complaining that the authority issued import licenses to select distributors, enabling them to bring in petroleum products. The complaint identified several distributors, including NNPC Ltd and Matrix Petroleum Services Limited. Dangote argued that such licenses should only be granted in the event of shortages, asserting that the NMDPRA failed to support local refineries adequately.
However, a counter-affidavit, submitted by market players, argued for the necessity of competitive practices essential to the health of Nigeria’s economy and oil sector. They argued that under Section 317(9) of the PIA, import permits are rightly issued, and claims of monopolization by Dangote must be scrutinized. In July 2025, without issuing a public statement, Dangote Refinery quietly withdrew its legal challenge regarding its import approvals, leaving unresolved questions about market competition and supply dynamics in Africa’s largest fuel market.
Nigeria’s Dependence on Fuel Imports
Historically, Nigeria has been reliant on imported gasoline due to the underperformance of its state-owned refineries. The $20 billion Dangote refinery, owned by billionaire businessman Aliko Dangote, aims to change this narrative by providing refined petroleum products domestically. Standing as Africa’s largest single-train refinery, with an installed capacity of 650,000 barrels per day, it is positioned to alleviate some of the financial pressures associated with foreign exchange used for fuel imports. Nonetheless, market players caution that domestic production alone cannot fully satisfy local demand, as gasoline imports persist while refineries work to expand their production and distribution capabilities.
