NNPC, marketers oppose Dangote bid to halt fuel imports, warn of monopoly risk
As Dangote pushes to curb fuel imports, NNPC and marketers argue that competition remains critical for price stability and nationwide supply.
The battle over who controls Nigeria’s petrol supply chain has moved back to the courtroom, with the Nigerian National Petroleum Company Limited (NNPC) and fuel marketers opposing efforts by the Dangote Petroleum Refinery to restrict fuel imports, arguing that doing so could create a monopoly and expose the country to supply disruptions.
In filings before the Federal High Court in Lagos, NNPC urged the court to dismiss a suit filed by the Dangote refinery challenging the issuance of petrol import licences by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The refinery is seeking to stop the continued importation of Premium Motor Spirit (PMS), arguing that local refining capacity, particularly from its 650,000-barrels-per-day Lekki facility, is sufficient to meet domestic demand. Dangote has repeatedly maintained that continued fuel imports undermine local refining investments and discourage efforts to build self-sufficiency in Nigeria’s petroleum sector.
However, NNPC told the court that restricting imports would threaten competition and place Nigeria’s energy security in the hands of a single supplier.
According to the state-owned oil company, petroleum products supplied by the refinery are sold at “significantly high and fluctuating market prices” driven by commercial considerations. It argued that there is no independently verified evidence showing the refinery can consistently satisfy Nigeria’s nationwide fuel demand without support from alternative supply channels.
NNPC further maintained that fuel security extends beyond refining capacity to include storage, transportation, evacuation, distribution and strategic reserve management.
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“Reliance on a single supplier within the petroleum industry poses grave risks to national energy security,” the company stated in its affidavit, warning that any operational disruption at the refinery could trigger shortages, supply disruptions and price instability if imports are restricted.
The national oil company also rejected allegations that it deliberately denied crude oil supplies to the refinery or sabotaged its operations, insisting that crude supply arrangements are influenced by commercial agreements, production realities, logistics and security considerations.
The legal dispute comes as Nigeria’s downstream petroleum market undergoes significant changes following fuel subsidy removal and the commencement of petrol production at the Dangote refinery in 2024.
Since entering the market, the refinery has aggressively competed for market share, repeatedly reducing petrol prices and intensifying competition among marketers and importers. While consumers have benefited from lower pump prices during several rounds of price cuts, tensions have grown between local refiners, importers and distributors over the future structure of the market.
Fuel marketers under the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) have thrown their weight behind NNPC’s position, arguing that competition remains necessary to ensure product availability and protect consumers from potential price manipulation.
PETROAN President Billy Gillis-Harry said a liberalised downstream market encourages efficiency, moderates prices and reduces the risk of supply shocks.
According to him, no single operator, regardless of its investment size, should dominate the market at the expense of competition.
“Competition remains a critical pillar for ensuring product availability, price moderation, efficiency and sustainability within the petroleum distribution value chain,” he said.
He argued that maintaining multiple supply sources would help prevent artificial scarcity and provide consumers with greater protection against exploitative pricing practices.
The marketers’ position aligns with the argument advanced by NNPC that import licences remain necessary under the Petroleum Industry Act (PIA) to guarantee market stability and uninterrupted fuel supply.
The state oil company also defended the actions of regulators, insisting that the continued issuance of import licences is lawful and does not violate provisions of the PIA. According to NNPC, the law grants regulators discretionary authority regarding backward integration policies rather than imposing an outright ban on fuel imports.
The latest suit marks another chapter in the ongoing rivalry between the Dangote refinery and key players in Nigeria’s downstream oil industry. A similar case filed in Abuja in 2024 was later withdrawn following government intervention.
At the centre of the dispute is a broader question that could shape the future of Nigeria’s fuel market: whether local refining capacity should gradually replace imports or whether multiple supply channels remain necessary to guarantee competition, price stability and energy security.
