Dangote Refinery: CPPE Rejects Monopoly Claims, Urges Support for Local Refining

The Centre for the Promotion of Private Enterprise (CPPE) has dismissed claims that the Dangote Refinery poses a monopolistic threat to Nigeria’s downstream petroleum sector, insisting that the country should prioritise policies that support domestic refining investments instead of encouraging increased fuel importation.

In a policy statement signed by its CEO Dr Muda Yusuf, and released on Sunday, the economic advocacy group argued that decades of fuel import dependence created deep structural distortions within the Nigerian economy, weakened the naira, intensified foreign exchange pressures, and contributed significantly to fiscal imbalances under the fuel subsidy regime.

The organisation stressed that Nigeria must prioritise the protection and expansion of local refining capacity rather than encourage policies that could expose domestic investors to excessive import competition and regulatory uncertainty.

What they are saying

The CPPE said the era of heavy dependence on imported petroleum products imposed enormous economic and fiscal costs on the country while exporting jobs and industrial value abroad.

• “Attempts to portray Dangote Refinery as a monopolistic threat are simplistic, fundamentally flawed and grossly unfair.  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.” 
• “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.” 
• “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.” 
• “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.” 

More insights

According to the CPPE, Nigeria’s former subsidy regime consumed trillions of naira annually, while petroleum imports exceeded $10 billion yearly at peak periods.

• The group argued that unrestricted fuel imports could discourage future industrial investments in Nigeria.
• It maintained that genuine competition in the downstream sector should come through the establishment of additional domestic refineries rather than dependence on imports.
• The organisation also noted that strategic sectors across the world often benefit from fiscal protections and supportive industrial policies.

The CPPE added that large-scale industrial investments naturally improve competitiveness through lower production costs, stronger value chains, and enhanced economic resilience.

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 dependence on fuel imports 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 noted that the Dangote Refinery did not prevent other investors from entering the refining 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), making it the first refinery globally to achieve full nameplate capacity in a single train of that scale.

The refinery said the milestone was achieved following the optimisation of its Crude Distillation Unit (CDU) and Motor Spirit (MS) production block, further strengthening steady-state operations at Africa’s largest oil refining facility.

Meanwhile, West Africa, in particular, has long been considered a destination for substandard fuel products, but the emergence of large-scale refining capacity in Nigeria is expected to change that narrative.

The Refinery successfully exported 456,000 tonnes of refined petroleum products through 12 cargoes lifted by international traders in March 2026.