NNPC accuses Dangote refinery of monopoly claims as refinery private placement draws $2 billion

Nigeria’s state oil company NNPC Limited has accused Dangote Petroleum Refinery & Petrochemicals of attempting to tighten control over fuel imports in a legal fight that is now pulling in regulators and fuel marketers, according to Reuters court filings.

In a defence filed at the Federal High Court in Lagos, NNPC said any move to cancel or restrict import licences issued to rival marketers could leave Africa’s largest crude producer exposed to supply gaps, sharper price swings, and risks to energy security.

NNPC defends fuel import policy

NNPC argued that Nigeria’s fuel market still relies on a mix of domestic refining and imports, and that sudden restrictions would create pressure points in distribution. The dispute stems from a lawsuit filed in April by Dangote Refinery against Nigeria’s attorney general and the midstream regulator, challenging import licences granted to marketers and NNPC.

Dangote argues the permits weaken local refining incentives and conflict with provisions of the Petroleum Industry Act. NNPC, however, maintains that the law allows regulated imports where necessary and gives authorities room to balance supply needs under the country’s backward-integration policy.

Regulator joins downstream legal case

The Nigerian Midstream and Downstream Petroleum Regulatory Authority has since moved to join the case, widening a legal process that now touches pricing, supply management and competition rules in the sector. Fuel marketers have also pushed back against Dangote’s claims, warning that limiting imports could tighten supply channels and raise market risks.

Court documents show NNPC also questioned whether the refinery can fully meet domestic demand on a consistent basis, saying there is no independently verified evidence that output alone can cover national consumption without imports. The state company rejected any suggestion that it has blocked crude supply, saying allocations depend on commercial terms, logistics and security conditions.

Investor demand builds ahead of IPO

The case comes at a sensitive moment for Dangote’s mega refinery. A planned initial public offering, now expected in September, has been delayed, even as investor interest builds. Dangote said a private placement tied to the refinery attracted about $2 billion in demand, though allocations will be limited. Femi Otedola is among those positioning for exposure, with plans to invest about $100 million from proceeds linked to the sale of Geregu Power shares.

Located in the Ibeju-Lekki Free Zone, the 650,000-barrel-a-day facility began operations in 2024 after years of construction delays and financing negotiations. Built at an estimated cost of $20 billion to $22 billion, it reached full output earlier this year and has become central to Nigeria’s effort to reduce dependence on imported fuel. Dangote is also planning a further expansion that could lift capacity to 1.4 million barrels per day over the next few years as part of a broader investment plan spanning refining, petrochemicals and logistics.