A fresh wave of confrontation appears to be brewing in Nigeria’s downstream petroleum sector, as the Dangote Refinery, a flagship $20 billion investment by Africa’s richest man, Alhaji Aliko Dangote, finds itself at odds with some oil marketers.
At the heart of the dispute lies a struggle for dominance, pricing power, and market control – issues that industry players warn could reshape the nation’s energy landscape.
Alhaji Dangote recently raised alarm over what he described as “entrenched interests” and “oil cabals” attempting to sabotage his 650,000-barrel-per-day refinery located in the Lekki Free Trade Zone, Lagos. Speaking at an investor forum in Lagos, the industrialist expressed concern over continued resistance to locally refined fuel, despite increased production from his facility.
“We are fighting, and the fight is not yet finished. But I have been fighting all my life, and I am ready and 100 per cent sure I will win at the end of the day,” Dangote declared.
He accused certain international oil companies of withholding crude supply from the refinery, in violation of the country’s domestic crude allocation policy. Additionally, he alleged that regulators were granting import licenses to marketers for substandard petroleum products, further undermining local refining efforts.
“In a system where, for 35 years, people are used to counting good money, and all of a sudden, they see that the days of counting that money have come to an end, you don’t expect them to pray for you,” Dangote said. “Of course, you expect them to fight back.”
The billionaire businessman noted that those resisting the refinery’s survival are individuals who profited from decades of subsidised fuel importation. He later clarified that his criticism was not directed at the Nigerian National Petroleum Company Limited (NNPCL), but rather at private marketers and traders who had become accustomed to windfall profits from fuel imports.
Scepticism from Marketers Amid Rising Imports
Despite the refinery’s increased output, recent data suggests that many marketers have continued to rely on foreign supply. Between March 1 and May 9, 2025, importers brought in 2.57 billion litres of Premium Motor Spirit (PMS), or petrol, according to vessel movement data from Blue Sea Maritime.
Specifically, 755.7 million litres were imported in March, 1.47 billion litres in April, and 331.3 million litres in just the first 10 days of May. At an average landing cost of N948 per litre, this represents a staggering N2.42 trillion spent on imports during the 70-day period.
This reliance on imported fuel persists despite substantial improvements in local refining capacity, raising questions about the motivations of the marketers.
Dangote’s concerns are not new. As far back as 2024, he voiced frustration over alleged sabotage, and at one point reportedly stated that he regretted building the refinery due to resistance from powerful interests.
Regulatory and Legal Challenges
In response to the ongoing challenges, Dangote Refinery initiated legal action against the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), seeking to halt the issuance of import licenses to fuel marketers. The case is currently pending before a federal high court.
This legal maneuver has further intensified tensions within the sector, with marketers accusing the refinery of attempting to dominate the market through the courts rather than through open competition.
Mixed Reactions from Industry Players
Reactions to Dangote’s claims have been mixed across the industry. While some stakeholders express solidarity with the refinery’s mission to end Nigeria’s dependence on fuel imports, others have voiced concerns about what they see as an emerging monopoly.
Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), called for a balanced approach.
“There should be no form of discord in the downstream sector over the source of petroleum product purchase,” he said. “Let Dangote refine with naira-for-crude, and let others operate freely. There will always be competition in business, but it should be healthy.”
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), also acknowledged the competitive pressure posed by Dangote’s operation but encouraged resilience.
“Every businessman wants to survive. If you are doing well, others will naturally push back. But we support Dangote because he’s helping Nigerians. Even though price slashes sometimes hurt our margins, it’s part of business,” Ukadike said.
DAPPMAN Raises Monopoly Concerns
On the other end of the spectrum, the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) expressed strong reservations about the refinery’s growing influence.
Speaking on a TVC programme, DAPPMAN Executive Secretary, Olufemi Adewole, rejected Dangote’s “oil cabal” narrative, insisting that the industry was made up of stakeholders with legitimate business interests.
“There is no cabal in the downstream sector,” Adewole said. “But yes, there are vested interests. Our members have invested billions over the years to keep fuel flowing when no one else could. They deserve fair returns.”
He warned of the dangers of allowing a single refinery to dictate market trends, stressing that Dangote’s current operational model excluded bulk depot owners from purchasing products on fair terms.
“Dangote Refinery prefers a selective approach. We have depots in Calabar, Port Harcourt and other cities ready to buy in bulk – 10,000, 15,000 metric tons – but access is restricted. That is not how a fair market should function,” Adewole stated.
He also lamented that price changes made after products had been dispatched had forced marketers into losses.
“We didn’t come out to make noise. But many of us have absorbed massive losses due to sudden price reductions after dispatch,” he said.
Refinery Output Improving, Imports Dropping
Despite the tensions, recent figures suggest that Dangote Refinery is gradually altering the dynamics of fuel supply in Nigeria. According to NMDPRA data, daily imports of petrol fell from 44.6 million litres in August 2024 to just 14.7 million litres as of April 13, 2025 – a 67% decline.
The reduction is attributed not only to Dangote’s increased output, but also to resumed activity at the Port Harcourt refinery and several modular refineries. The NNPCL, which was once the largest importer, has significantly scaled back its foreign purchases, preferring to source locally.
While this shift is seen as progress toward self-sufficiency, DAPPMAN maintains that it is too soon to eliminate fuel importation entirely.
“Stopping imports now would be chaotic. We still have demand the refinery alone cannot meet. Let’s adopt a phased transition strategy,” Adewole advised.
He emphasised that operations at private depots continue to bear the brunt of fuel distribution in the country, despite challenges in logistics and financing.
“Depot operations are tough. Equipment is ageing. Capital costs are high. To import 20,000 metric tons, a marketer needs exposure of over N20 billion, often bank-funded at high interest rates,” Adewole said.
A Sector at a Crossroads
Industry analysts warn that the current standoff between the Dangote Refinery and other players could have far-reaching consequences for Nigeria’s energy security and economic stability.
While Dangote’s investment promises a transformative leap toward refining self-sufficiency, the fears of monopolistic practices, regulatory bottlenecks, and exclusionary trade models continue to stoke anxiety among stakeholders.
As the court deliberates on the legality of current regulatory actions and as marketers weigh the financial and logistical implications of shifting from imports to local sourcing, the next few months could prove decisive for the downstream oil sector.
For now, one thing is certain: the fight for control of Nigeria’s petroleum supply chain is far from over.