Despite the commencement of local refining by the $20 billion Dangote Petroleum Refinery, recent data from Nigeria’s downstream regulator shows that petroleum marketers are still heavily reliant on imports to meet domestic fuel demand. Between May and June 2025, over 71 per cent of petrol consumed in the country came from foreign sources, underlining concerns about market competitiveness, pricing, and the future of local refining.
Marketers Prioritise Imports Despite Domestic Refining Capacity
According to fresh figures from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), 3.25 billion litres of petrol were consumed during May and June. Of this, a staggering 2.32 billion litres—or 71.38 per cent—were imported, while just 927 million litres (28.62 per cent) were sourced from local refineries, primarily the Dangote facility.
This pattern indicates a significant reluctance among fuel marketers to fully embrace locally refined products, despite the administration’s emphasis on import substitution and the operational status of one of Africa’s largest refining complexes.
Daily Supply Trends and Regional Demand Patterns
Further analysis of the report presented to the Federation Accounts Allocation Committee (FAAC) showed that June’s daily petrol import averaged 34.1 million litres, totaling 1.02 billion litres. In contrast, domestic refineries supplied just 15.2 million litres per day. May followed a similar trend with imports averaging 43.2 million litres daily, compared to 15.7 million litres from local production.
Petrol distribution in June reached 1.48 billion litres, a 16.4 per cent decline from May’s 1.77 billion litres. The average pump price of N905 per litre implies marketers spent over N2.1 trillion on imports during the two-month period.
Regionally, Lagos topped the list with 205.66 million litres trucked out, followed by Ogun (88.69 million litres), FCT (77.5 million litres), Oyo (72.8 million litres), and Delta (68.5 million litres). Meanwhile, Yobe, Jigawa, and Ekiti recorded the least volumes.
Import Dependence Extends to Other Fuels
The trend wasn’t limited to petrol. Aviation Turbine Kerosene (ATK) and Household Kerosene (HHK) were almost entirely imported, with over 99 per cent of both products sourced abroad. Diesel imports also rose—from 7.3 million litres daily in May to 8.7 million litres in June—despite modest growth in local production. Liquefied Petroleum Gas (LPG) had zero local output during the period.
This continued reliance on foreign supplies has sparked a debate over Nigeria’s energy security, industrial policy, and market competitiveness.
Dangote Seeks Protection Under ‘Nigeria First’ Policy
Amid these dynamics, Aliko Dangote has renewed calls for the government to protect local refining. Speaking at the Global Commodity Insights Conference on West African Refined Fuel Markets, the Dangote Group president urged President Bola Tinubu to include refined petroleum products in the list of imports banned under the ‘Nigeria First’ policy.
According to him, unregulated fuel importation is undermining the viability of domestic refineries and deterring further investment in the sector.
“The Nigeria First policy announced by His Excellency, President Bola Tinubu, should apply to the petroleum product sector and all other sectors,” Dangote said, arguing that countries like the United States and the European Union actively protect their local industries.
Marketers Push Back Against Import Ban
However, Dangote’s appeal has met stiff resistance from oil marketers and industry stakeholders who warn against monopolistic tendencies.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), rejected the proposed import ban, warning it could entrench monopoly and distort the free market.
“We fear monopoly. The fear of monopoly is the beginning of wisdom,” Ukadike said. “Let Dangote compete on price, not policy. If his product is cheaper, we will buy.”
He pointed out that despite being locally refined, Dangote’s petrol is not the most affordable on the market. Many marketers, he added, rely on bank loans and cannot afford supply restrictions, especially when alternatives offer better pricing flexibility.
Price, Not Policy, Driving Market Choices
Billy Gillis-Harry, President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), echoed similar concerns. While supportive of local production, he stressed that importation stabilises supply and prevents shortages.
“We are running a free economy,” Gillis-Harry said. “Importation of all products is useful. No one company should dominate the downstream sector.”
Likewise, Jeremiah Olatide, CEO of PetroleumPrice.ng, explained that importers are capitalising on cheaper landing costs compared to Dangote’s coastal pricing model. In July, over 80 per cent of private depots in Lagos reportedly sold petrol below Dangote’s ex-depot rates.
“This has led to a significant decline in sales from the Dangote refinery while importers saw a sharp increase,” he told The PUNCH. “Importers have ramped up cargo volumes in anticipation of Dangote’s August 15 supply expansion.”
Olatide also hinted at an approaching inflection point in the market: “August 15 is going to spring up surprises. The downstream sector will experience some policy shifts and power tussles.”
Experts Warn Against Monopolistic Structure
Energy law expert, Prof Dayo Ayoade of the University of Lagos, warned against any form of restriction that could promote monopoly.
“No, we cannot have a ban on petroleum imports. That would be completely unacceptable. We need multiple supply sources for energy security and national stability,” he said.
He added that any attempt to impose trade barriers must also align with international trade regulations and legal frameworks. “We must be clever about how we approach it. If local products become cheaper and better, they will naturally dominate.”
Outlook: Industry at a Crossroads
As the Dangote Refinery prepares to scale up petrol supply by mid-August, the Nigerian fuel market finds itself at a pivotal moment. The choices made by policymakers in the coming weeks—whether leaning toward protectionism or market liberalisation—will shape the future of domestic refining, competition, and energy security.
The debate underscores the need for a balanced approach: one that encourages local industry without stifling competition, supports affordability for consumers, and ensures a stable and transparent downstream oil sector.