Dangote Refinery Not a Monopoly, CPPE Says, Urges Nigeria to Protect Local Refining

The Centre for the Promotion of Private Enterprise (CPPE) has rejected claims that the Dangote Refinery is a monopolistic threat to Nigeria’s downstream petroleum sector. The group insists the country should prioritise policies that support domestic refining instead of encouraging more fuel imports.

In a policy statement released on Sunday, CPPE CEO Dr Muda Yusuf argued that decades of fuel import dependence created deep structural distortions in the Nigerian economy. It weakened the naira, intensified foreign exchange pressures, and contributed to fiscal imbalances under the fuel subsidy regime.

The CPPE said Nigeria must protect and expand local refining capacity. It warned against policies that expose domestic investors to excessive import competition and regulatory uncertainty.

“Attempts to portray Dangote Refinery as a monopolistic threat are simplistic, fundamentally flawed and grossly unfair,” the statement read. “The refinery did not prevent other investors from entering the sector. It did not cause the collapse of state-owned refineries. It simply undertook an extraordinary industrial investment at a scale unprecedented in Africa.”

The group noted that Nigeria’s former subsidy regime consumed trillions of naira annually. At peak periods, petroleum imports exceeded $10 billion yearly. Unrestricted fuel imports could discourage future industrial investments in Nigeria, the CPPE warned.

“For decades, Nigeria’s dependence on imported petroleum products created deep distortions within the economy. It exerted enormous pressure on foreign reserves, weakened the naira, accelerated the collapse of domestic refineries, entrenched a rent-seeking ecosystem, worsened FX illiquidity, fuelled corruption within the subsidy regime and imposed severe fiscal burdens on public finances,” the CPPE added.

The organisation argued that genuine competition in the downstream sector should come through additional domestic refineries, not imports. It noted that strategic sectors across the world often benefit from fiscal protections and supportive industrial policies.

“Nigeria has just witnessed one of the most consequential industrial investments in Africa through the establishment of the Dangote Refinery, alongside growing investments in modular refineries across the country. These investments should ordinarily be strategically supported, celebrated and strengthened,” the CPPE said.

“Instead, there appears to be mounting pressure for unrestricted importation of refined petroleum products — a policy orientation capable of undermining domestic refining investments and discouraging future industrial commitments.”

Backstory

Nigeria has historically relied heavily on imported refined petroleum products despite being one of Africa’s largest crude oil producers. The collapse and underperformance of state-owned refineries increased that dependence for decades. Fuel subsidy payments placed severe pressure on government finances and foreign exchange reserves.

The commencement of operations at the Dangote Refinery and growing modular refinery investments marked a major shift toward domestic refining capacity. The CPPE said the Dangote Refinery did not prevent other investors from entering the sector but instead undertook what it described as an unprecedented industrial investment at continental scale.

What you should know

In February, Dangote Petroleum Refinery announced it reached its full designed capacity of 650,000 barrels of crude oil per day (bpd). It is the first refinery globally to achieve full nameplate capacity in a single train of that scale. The refinery said the milestone was achieved after optimising its Crude Distillation Unit and Motor Spirit production block.

West Africa has long been a destination for substandard fuel products. The emergence of large-scale refining capacity in Nigeria is expected to change that narrative. In March 2026, the refinery successfully exported 456,000 tonnes of refined petroleum products through 12 cargoes lifted by international traders.