The Real Test of Nigeria Energy Reform Beyond Dangote, By Collins Nweke

The escalating dispute between Africa’s largest industrialist, Aliko Dangote, and Nigeria’s petroleum regulators has often been reduced to a clash of egos or commercial interests. That framing is convenient but dangerously misleading. What is unfolding is not merely a corporate grievance. It is a stress test of Nigeria’s commitment to energy reform, industrialisation, and credible governance.

Recent developments have elevated the stakes. The resignation today of senior regulators at the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Nigerian Upstream Petroleum Regulatory Commission, following sustained allegations of regulatory obstruction and corruption, has transformed a policy debate into an institutional reckoning. President Bola Ahmed Tinubu’s decision to nominate new leadership now places Nigeria at a crossroads: consolidate reform or retreat into familiar dysfunction.

At stake is a fundamental question: Can Nigeria genuinely prioritise production over import dependence, or will entrenched interests continue to shape outcomes behind the veil of regulation?

Why Fuel Imports Undermine Domestic Refining and Jobs

The argument that continued fuel imports undermine domestic refining is not ideological. It is economic reality. No country industrialises by importing what it already has the capacity to produce locally. Persistent imports distort pricing, weaken capacity utilisation, and delay the development of robust value chains.

Refining is not a standalone activity. It anchors employment across logistics, petrochemicals, engineering services, maintenance, insurance, and finance. When domestic refineries are denied market access, the casualties are jobs, skills development, foreign-exchange savings, and investor confidence.

Nigeria’s ambition to end fuel imports was never symbolic. It was meant to trigger structural economic transformation. That ambition rings hollow if imports continue unabated even as domestic capacity comes on stream.

From Brown Envelopes to Regulatory Capture

When accusations of “oil mafias” are raised, they should not be dismissed as rhetoric. What is being described is regulatory capture. And that is a subtle, but far more corrosive, form of corruption.

Today’s corruption in the fuel sector rarely announces itself. It manifests through selective enforcement, opaque licensing, delayed approvals, shifting quality benchmarks, and discretionary rule-making. These practices reward arbitrage over value creation and privilege intermediaries over producers. The danger lies in appearance. Everything seems procedurally correct. But the outcomes repeatedly favour a narrow set of interests while national objectives suffer. This is corruption hiding behind compliance.

Transparency Gaps and the Role of NNPC Ltd.

Nigeria’s energy reform story is not without progress. Nigerian National Petroleum Company Limited has made visible strides since its commercialisation: audited accounts, clearer governance structures, and improved disclosures.

Yet transparency is not an event. It  is a system. In fuel importation, transparency remains incomplete. Import volumes, pricing mechanisms, contract allocations, and timelines are still not consistently visible or independently verifiable. Partial transparency may raise awareness, but it does not build trust. And in investment, trust is a true currency.

The Transition Nigeria Failed to Manage

Nigeria’s mistake was not building a mega-refinery. It was failing to manage the transition.

Rather than designing a phased shift from imports to domestic refining;  with clear timelines, offtake guarantees, and regulatory alignment; the old import regime was allowed to persist. In any economy, reforms that threaten rent-based business models provoke resistance. Fuel importation in Nigeria has long been lucrative, protected by opacity and complexity. The refinery challenged that ecosystem. Resistance was inevitable. This was not because reform was flawed, but because it was insufficiently protected.

Why the Regulatory Resignations Matter

The resignations at the leadership of Nigerian Midstream and Downstream Petroleum Regulatory Authority and Nigerian Upstream Petroleum Regulatory Commission represent more than routine personnel changes. They mark a rare moment when regulatory power is forced into public accountability.

This is now a defining test for the Tinubu administration. Continuity without correction would signal cosmetic reform. An institutional reset would signal seriousness. This implies clear mandates, transparent processes, and measurable performance benchmarks.

No Investor Can Reform a System Alone

Challenging entrenched interests is never easy. Capital, scale, and credibility help. However these are no substitute for institutional backing. No private investor, no matter how large, should be expected to dismantle systemic distortions alone. That responsibility belongs to the state. Reform succeeds when institutions align behind declared policy objectives. It fails when reformers are left to battle the system unaided.

The Reforms Nigeria Can No Longer Avoid

If Nigeria is serious about prioritising local refining, several actions are unavoidable:

• Guaranteed offtake for domestically refined fuel where quality standards are met
• Uniform application of standards to imported and locally refined products
• A clear sunset timeline for fuel imports once domestic capacity suffices
• Regulatory predictability, with stable, transparent, and consistently enforced rules

Above all, regulators must shift from a posture of control to one of market facilitation. Regulation should enable production. It should not frustrate it.

What This Episode Says About Doing Business in Nigeria

Nigeria does not lack entrepreneurs or capital. It lacks predictability. Investors can price risk. But they cannot price uncertainty engineered by inconsistent regulation.

When Africa’s largest single industrial investment struggles against regulatory ambiguity, the signal to smaller investors is unmistakable and chilling. This is why corruption today is less about theft and more about systemic uncertainty that quietly drives capital away.

A Moment That Will Define Energy Reform

Handled poorly, this episode could reduce Nigeria’s post-subsidy energy reform to rhetoric. Handled well, it could become a turning point, forcing alignment between policy declarations and institutional behaviour.

The Dangote Refinery was meant to anchor a new energy economy: lower imports, stronger foreign-exchange fundamentals, energy security, and industrial jobs. Whether it fulfils that promise depends not on one individual, but on whether Nigeria chooses reform over resistance. In the end, this is not about Dangote. This is about whether Nigeria is ready to reward production over speculation, transparency over opacity, and reform over rent-seeking.

This opinion editorial was inspired by an  interview  that I had with Thami Ngubeni of Channel Africa of South African Broadcasting Corporation on 15 December 2025 prior to the regulatory angency resignations.