By Abiodun Folarin
WorldStage– Chairman of Alliance for Economic Research and Ethics Ltd/GTE, Mr Dele Oye, has faulted the Nigerian National Petroleum Company Limited’s (NNPC Ltd) claim that restricting fuel import licences could turn Dangote Refinery into a monopoly, insisting that Africa’s largest refinery could save Nigeria about $11 billion annually in foreign exchange and sharply cut the country’s N15.42 trillion petrol import bill recorded in 2024.
Oye also criticised NNPC for warning about possible supply disruptions from relying heavily on Dangote Refinery, arguing that the real risk lies in Nigeria’s dependence on imported fuel and exposure to global price shocks, shipping disruptions and foreign exchange volatility.
Oye, in a document cited by WorldStage, titled: ‘The Paradox of Monopoly: Why NNPC’s importation argument betrays Nigerians economic sovereignty’ emphasised that the $20 billion Dangote Refinery has a processing capacity of 650,000 barrels of crude oil per day, producing up to 53.6 million litres of Premium Motor Spirit (PMS) and 23.6 million litres of Automotive Gas Oil (AGO) daily.
The refinery is currently exporting jet fuel to European markets, demonstrating global competitiveness. It also has the capacity to meet 100 per cent of Nigeria’s requirements for refined petroleum products, including petrol, diesel, kerosene and aviation fuel, with surplus volumes available for export.
“Currently, it exports petrol, diesel and jet fuel across global markets, including Africa, Asia, the Americas and Europe, demonstrating strong international competitiveness.
“Notwithstanding, NNPC argues that this facility a testament to Nigerian industrial capability must not be allowed to supply the domestic market without competition from imports.”
According to Oye, Nigeria’s downstream petroleum sector has, for decades, been characterised not by competition but by state-backed import dependency.
He said that before the Petroleum Industry Act (PIA) 2021, it was solely the responsibility of NNPC and its subsidiaries to import petroleum products.
“This was a genuine monopoly: one entity, state-backed, controlling the entire importation pipeline.
“The emergence of Dangote Refinery breaks this monopoly. It introduces domestic production as an alternative to importation. It creates competition where none existed. To argue that this constitutes a monopoly is to invert the meaning of the word.”
Oye stated that NNPC’s warning that relying on a single domestic refinery exposes Nigeria to supply disruptions was ironic, considering the corporation’s own record with state-owned refineries.
Nigeria’s three state-owned refineries in Port Harcourt, Warri and Kaduna, with a combined capacity of 445,000 barrels per day, have operated far below capacity for years despite billions of dollars spent on rehabilitation projects.
He noted that only some units at the Port Harcourt refinery operated briefly before shutting down again, while the Warri refinery never fully restarted and the Kaduna refinery remained shut.
He added that civil society groups had repeatedly demanded accountability for the billions committed to refinery rehabilitation without transparent audits of the outcomes.
Oye further argued that if NNPC was genuinely concerned about fuel security, it should support and promote Dangote Refinery, rehabilitate state-owned refineries through transparent and accountable partnerships, and encourage additional private refining investments through policy incentives.
“Importation does not enhance energy security; it creates import vulnerability exposure to global price shocks, currency fluctuations, shipping disruptions and geopolitical risks,” he said.
He added that Nigeria spent a record ₦15.42 trillion, approximately $10 billion, importing petrol alone in 2024, a situation he said placed significant pressure on foreign exchange reserves.
According to him, reducing fuel imports would ease demand for dollars used to pay foreign suppliers and help stabilise the naira.
“Foreign exchange reserves that could finance productive imports such as machinery, technology and industrial inputs are instead being depleted. Capital that could fund infrastructure, education or healthcare is being diverted to consumption,” he said.
Oye maintained that with Dangote Refinery operating at full capacity, the massive annual outflow on fuel imports could be reduced by between 80 and 90 per cent, thereby conserving foreign exchange for more productive uses.
He further argued that NNPC’s importation preference violates provisions of the Petroleum Industry Act (PIA) 2021, particularly Sections 317(8) and 317(9), which prioritise local refining under the backward integration policy.
It also cited the Nigerian Oil and Gas Industry Content Development Act, which mandates first consideration for Nigerian companies and locally manufactured goods in the oil and gas sector.
Oye, maintained that importation should only serve as a temporary measure to cover supply shortfalls and not as a long-term strategy where domestic refining capacity already exists.
The report also questioned NNPC’s recent partnership discussions with Chinese firms for the rehabilitation of the Port Harcourt and Warri refineries.
According to the organisation, the proposed arrangement, which could reportedly hand majority equity stakes to foreign partners, contradicts NNPC’s concerns about monopoly while raising fresh questions over transparency, accountability and national control of strategic assets.
The brief called for a comprehensive audit of billions of dollars previously spent on refinery rehabilitation projects, many of which reportedly failed to deliver operational refineries.
Drawing comparisons with countries such as Brazil, Saudi Arabia, India and the United States, the report argued that successful oil-producing nations actively protect and promote domestic refining industries through local content laws, tariffs and industrial incentives.
It said Nigeria should adopt similar measures to strengthen indigenous refining capacity, conserve foreign exchange, create jobs and deepen industrialisation.
The organisation warned that continued reliance on fuel importation would worsen pressure on the naira, deplete foreign reserves and export employment opportunities to foreign economies.
It urged the Federal Government to align petroleum sector policies with President Bola Tinubu’s economic agenda focused on domestic production, industrial growth and value addition.
According to the report, supporting local refining is not merely an economic choice but “a question of national sovereignty, economic dignity and long-term development.”
On accountability deficit,Oye said the NNPC had refuse to answer the following questions on, what happened to previous turnaround maintenance contracts? “Over $2.5 billion spent between 2021 and 2025 with negligible results where is the public audit?
“Why Chinese firms with unproven refinery track records? Sanjiang Chemical and Xinganchen are not recognized global refining operators. Their experience appears to be in chemical and industrial park management, not petroleum refining operations.
“Why equity rather than performance-based contracts? Previous rehabilitation contracts failed because they lacked performance guarantees. The new model transfers ownership rather than ensuring performance.
“Where is the competitive bidding? Was this partnership the result of an open, transparent procurement process?
