Dangote Refinery: Regulators Urged to Safeguard Fair Competition and Support New Entrants

The completion of the $20 billion Dangote Refinery marks a historic turning point in Nigeria’s oil and gas sector, offering the promise of energy independence and economic transformation. However, experts and industry observers warn that the success of this milestone depends on how well regulatory agencies manage competition and prevent market dominance.

For nearly four decades, Nigeria—despite being one of Africa’s largest crude oil producers—has relied heavily on imported refined petroleum products. This dependency led to fuel subsidies and economic instability, exposing the nation to fluctuations in global oil markets. The commissioning of the Dangote Refinery, with a capacity of 650,000 barrels per day, is therefore a major stride toward reversing that trend.

Promise and Peril

The refinery is already being celebrated for its potential to stabilise the naira, conserve foreign exchange, and reduce Nigeria’s dependence on imported fuel. Yet, there are growing concerns that its massive scale and integrated structure could enable it to dominate the market at the expense of other players.

Reports suggest that the refinery has begun offering free product delivery to major retailers, a move seen by many as an attempt to lure them away from long-term partnerships with importers and depots. Industry stakeholders have described the strategy as “predatory,” warning that it could force smaller competitors out of business.

In addition, the refinery has reportedly slashed ex-depot prices—absorbing losses to undercut competitors who cannot afford to do the same. While Dangote Group insists its actions represent healthy competition, critics argue that such practices risk creating a monopoly, reducing consumer choice, and discouraging new investors from entering the downstream sector.

Role of Regulators

Nigeria’s key regulatory agencies—the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Federal Competition and Consumer Protection Commission (FCCPC), and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC)—are being called upon to ensure fair play in the evolving market.

These agencies have both a constitutional and moral duty to promote transparency, monitor market behaviour, and intervene when larger corporations engage in anti-competitive practices, even if those actions appear lawful. Their vigilance, experts say, will determine whether the refinery strengthens the energy sector or entrenches monopolistic power.

Crucially, regulators must create a supportive environment for new and smaller entrants. A thriving downstream sector requires diversity, innovation, and fair competition. The Dangote Group itself benefitted from protective policies that once shielded indigenous entrepreneurs from global corporate dominance; similar fairness, observers argue, should now be extended to others within Nigeria’s energy landscape.

Finding the Balance

Nigeria stands at a defining moment. While the Dangote Refinery represents progress toward industrial self-reliance, unchecked dominance could undermine the very goals of deregulation and market liberalisation.

The refinery may be privately owned, but it operates within a market that ultimately belongs to the Nigerian people. Regulators must therefore strike a delicate balance—encouraging private investment while ensuring that no single player controls the nation’s energy destiny.

If managed wisely, the Dangote Refinery could become a cornerstone of shared prosperity, driving competition, efficiency, and growth. But without strong regulatory oversight, it risks becoming a symbol of concentrated power in an economy still striving for equity and inclusiveness.

Olatunde Adebanjo is a lawyer and real estate advisor based in Lagos. He writes on the intersection of law, real estate, and public policy.