NNPC cries monopoly on Dangote while state refineries remain idle

The Nigerian National Petroleum Company Limited is fighting to preserve fuel import rights for rival marketers, warning the Federal High Court in Lagos, that handing effective market control to Dangote Petroleum Refinery would expose Africa’s most populous nation to supply shocks, volatile pump prices, and risks to national energy security.

The state firm’s own refineries at Port Harcourt and Warri have collectively consumed more than $2.4 billion in public funds without producing a meaningful drop of refined fuel output.

Now, the same institution is in a Federal High Court in Lagos, arguing that a privately built, fully operational 650,000-barrel-per-day refinery should not be allowed to use the law to shut out foreign competition.

According to court documents seen by Reuters, ‌NNPC accused Dangote Petroleum Refinery of seeking to restrict competition and expose the country’s fuel market to monopoly control by challenging import licences issued to rival marketers.

Dangote Petroleum Refinery had filed a fresh lawsuit seeking to overturn fuel import licences issued to the Nigerian National Petroleum Company Limited and fuel marketers, reigniting tensions over petrol importation in Nigeria despite rising domestic refining capacity.

In its proposed defence filed at the Federal High Court in Lagos, NNPC said granting Dangote’s request to void or restrict import permits would threaten supply security and undermine market competition.

It argued the Petroleum Industry Act allows import licences to companies with local refining capacity or proven track records in international crude and petroleum-product trading, and that regulators retain the discretion to manage imports under Nigeria’s backwards-integration policy.

Court documents seen by Reuters said NNPC also argued Dangote had not provided “credible, independent or verifiable evidence” that the refinery could meet Nigeria’s total fuel demand or guarantee uninterrupted nationwide supply.

The regulator, the Nigerian Midstream and Downstream Petroleum Regulatory Authority, has applied to join the proceedings, widening a dispute that now involves Nigeria’s attorney-general and several independent fuel marketing companies, according to Reuters.

The NMDPRA had recently given six companies licences to import 720,000 metric tonnes of premium motor spirit.

Some Industry groups have rallied to NNPC’s side. Hammed Fashola, vice president of IPMAN, said Dangote should concentrate on reasonable pricing rather than seeking an importation ban.

PETROAN, the association of fuel retail outlets, warned that a suit aimed at nullifying the licences would introduce huge volatility across the entire downstream value chain and push prices higher.

The backdrop makes NNPC’s monopoly argument awkward to sustain. Under approvals granted in 2021 by Nigeria’s Federal Executive Council, the government committed $1.5 billion to Port Harcourt, $897.6 million to Warri, and $740.7 million to Kaduna, bringing total planned spending to over $3.1 billion.

Yet the tangible impact of the roughly $2.4 billion already deployed on Port Harcourt and Warri remains difficult to discern. Although mechanical completion milestones were declared on Port Harcourt’s 60,000-barrel-per-day unit in 2023 and Warri’s 78,000 bpd facility in 2024, both refineries operated only briefly after a relaunch in late 2024 before shutting down again.

The Port Harcourt refinery alone accumulated over N2.2 trillion in obligations in one year, rising to N4.22 trillion in total debt. Even when crude was supplied, utilisation hovered around 50 to 55 per cent, destroying rather than creating value.

In response, NNPC has inked a memorandum of understanding with two Chinese industrial firms, Sanjiang Chemical Company Limited and Xinganchen (Fuzhou) Industrial Park, to revive the two plants under what it describes as a potential Technical Equity Partnership.

That agreement, signed in Jiaxing, is the latest in a long line of rehabilitation promises attached to the same assets.

Dangote has declined to comment while the case remains active. The refinery previously filed a similar lawsuit in 2024 before withdrawing it, without publicly explaining the decision, after the federal government intervened. The refilling signals that whatever accommodation was reached then has frayed.

The timing is particularly sensitive for Dangote. The refinery hit its full capacity of 650,000 barrels per day in February, and Aliko Dangote has confirmed that the listing is expected to launch in September 2026.

Pre-IPO private placement requests have already approached $2 billion, with the refinery valued at between $40 billion and $50 billion by analysts. Unresolved questions over market access rules, import competition, and the legal standing of the refinery’s domestic sales position add a layer of regulatory uncertainty that investors will need to price in.

The Dangote refinery supplied almost 80 percent of Nigeria’s daily petrol consumption in April 2026, having nearly utilised its maximum capacity.

Whether that commercial dominance constitutes a monopoly in the making or simply the efficient operation of a large industrial investment is the question now before the Federal High Court.

A hearing is scheduled for the coming weeks.