Nigeria’s fuel supply chain is undergoing a historic transformation after a major policy shift placed the Dangote Petroleum Refinery at the centre of the country’s petrol market, now estimated to be worth about ₦14.4 trillion annually.
Industry data shows the refinery currently supplies the vast majority of petrol consumed nationwide following the suspension of import licences by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). While many analysts view the development as a major milestone for local refining, it has also ignited debate among economists, labour groups and energy experts over the risks of relying heavily on a single supplier for such a critical commodity.
For decades, Nigeria depended largely on imported petrol due to the poor performance of state-owned refineries. The latest policy change is therefore widely seen as a turning point in the country’s long-running struggle to achieve energy independence and strengthen domestic refining capacity.
Local refineries now dominate petrol supply
Market data released by the NMDPRA in its February 2026 fact sheet indicates that domestic refining now accounts for the overwhelming majority of petrol supply in Nigeria.
According to the regulator, local refineries delivered about 36.5 million litres of petrol per day, while imports accounted for only around three million litres daily. This brings the country’s total daily petrol supply to roughly 39.5 million litres, meaning domestic production now represents about 92% of Nigeria’s petrol consumption.
At present, the Dangote refinery remains the only facility producing petrol locally at large commercial scale. Several smaller modular refineries are operational across the country, but most of them currently focus on diesel and other petroleum products rather than petrol.
Using a conservative average price of ₦1,000 per litre, Nigeria’s daily petrol demand translates into an annual market value exceeding ₦14.4 trillion, making it one of the largest fuel markets in Africa.
Experts warn about market concentration
Despite the progress in domestic refining, some analysts caution 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 warned that abrupt regulatory shifts can sometimes trigger strategic responses from market players.
According to him, such signals may lead to precautionary stockpiling, opportunistic pricing, or competition for logistical advantages in the distribution chain.
Iledare stressed that regulators must provide consistent guidance and ensure that refining capacity, distribution infrastructure and pricing mechanisms remain strong enough to meet national demand reliably.
Regulators urged to protect competition
Energy law expert Dayo Ayoade believes Nigeria’s current dependence on the Dangote refinery reflects structural gaps in refining capacity rather than deliberate market dominance by the company.
He noted that regulators still possess wide powers under the Petroleum Industry Act to monitor market competition and intervene if necessary.
Ayoade explained that if a dominant supplier is found to be abusing its market position, authorities could impose sanctions or corrective measures. He added that the sector may become more competitive as additional refining projects come online.
Concerns over energy security
Some industry stakeholders have also raised concerns about energy security in a system dominated by a single refinery.
Energy analyst Jeremiah Olatide argued that while expanding domestic refining is positive, a balanced supply structure could provide greater stability.
He suggested that a system where about 70% of demand is met locally and 30% through imports could create a smoother transition while maintaining competitive pressure in the fuel market.
Labour groups warn about consumer risks
Labour organisations have also expressed concern over the concentration of fuel supply.
The Nigeria Labour Congress (NLC) warned that dominance by a single supplier in such a strategic sector could expose consumers to price pressures if regulatory oversight weakens.
According to the union’s Assistant Secretary-General Christopher Onyeka, healthy competition remains essential in preventing excessive pricing power within any economy.
Economist Aliyu Alias echoed similar concerns, noting that limited participation from other refiners reduces the competitive forces that typically help stabilise prices in the downstream sector.
Government defends import suspension
The NMDPRA has defended its decision to suspend petrol import licences, arguing that the policy 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 rather than returning to heavy dependence on imports.
According to him, Nigeria’s petroleum sector has evolved through several phases — from early domestic refining to decades of fuel imports after state-owned refineries declined. The emergence of the Dangote refinery, he said, marks a new stage where local refining can finally meet national demand.
Global oil volatility adds pressure
Nigeria’s fuel market transformation is also unfolding amid instability in global energy markets.
The International Energy Agency recently announced plans to release 400 million barrels of crude oil from emergency reserves to cushion supply disruptions linked to tensions around the Strait of Hormuz, a vital shipping route responsible for nearly 20% of global oil and gas shipments.
Crude prices have hovered around $90 per barrel, reflecting ongoing geopolitical uncertainty.
Petrol prices begin to adjust
Following reductions in refinery gantry prices, several filling stations across Nigeria have started adjusting pump prices.
Market checks indicate petrol is currently selling between ₦1,130 and ₦1,150 per litre at many outlets, though some stations still charge higher prices 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.
