“Dangote refinery game-changer but not dominating West African Market” – Argus Media VP
Oredola Adeola
The Major Energies Marketers Association of Nigeria (MEMAN) has urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the Federal Competition and Consumer Protection Commission (FCCPC), and other regulatory agencies to uphold a fair, competitive, and well-regulated marketplace.
The Marketers made these calls on the sidelines of challenges arising from transitioning to a fully deregulated downstream market.
Clement Isong, MEMAN’s Chief Executive Officer, made this known in a communiqué issued after the association’s Q1 2025 training & engagement with Energy Editors in Lagos on Wednesday.
Speaking on the theme “Refinery Basics, Gasoline Pricing & Trade Flows in Nigeria,” Isong noted that the implementation of the Petroleum Industry Act (PIA) remains on course, despite expected resistance from stakeholders accustomed to price controls.
“While ongoing debates and discussions are expected, they should be encouraged as part of the natural evolution of a market-driven energy sector,” he stated.
He further stressed that transitioning from a state-controlled system to a competitive, deregulated market is crucial for enhancing efficiency, transparency, and long-term economic growth, noting that the process requires patience, adaptation, and trust.
Isong acknowledged that as the market stabilizes, challenges will emerge, and resistance from those accustomed to price controls is inevitable.
However, he emphasized that with strong regulation, industry collaboration, and public transparency, Nigeria can fully harness the benefits of this transformation.
“The transition may not be without hurdles, but with robust regulation, industry cooperation, and openness, the country stands to gain significantly,” he stated.
The MEMAN CEO further stressed that a well-functioning, deregulated market will attract increased investment, enhance efficiency, and foster a more competitive environment that ultimately benefits both businesses and consumers.
James Gooder, Vice President, Crude Oil at Argus Media, during his presentation said, while Dangote’s refinery is a game-changer, it does not dominate the West African market, as other import options remain competitive.
He said, “It would not be beneficial for Nigeria to move from an NNPC monopoly to a Dangote monopoly, under a fully deregulated market framework.
He added that importation of petroleum products to Nigeria persists despite significant local refining volumes.
Gooder explained that Dangote Refinery’s impact on the market is undeniable, but noted that production not yet at full capacity, imported fuel will continue to play a role in meeting Nigeria’s demand.
He stated that the commencement of crude oil refining by Dangote in November 2024, has reshaped market dynamics and reduced fuel smuggling to neighbouring African countries.
The VP, Crude Oil at Argus Media however emphasised that deregulation, combined with local refining, has made Nigeria’s fuel market more transparent, cutting down the volume of petrol illegally exported to Cameroon and Niger due to diminished smuggling incentives.
He added that the increased competition between Dangote and fuel importers has led to a gradual drop in petrol prices, with rates in Lagos now hovering around N868 to N870 per litre—reflecting market realities rather than previously controlled prices that encouraged smuggling.
According to Gooder, the demand for petrol in Nigeria has declined, prompting more efficient consumption while reducing import dependence.
“Notably, Nigeria has also begun exporting significant volumes of Premium Motor Spirit (PMS) to the global market, a development that would have been unimaginable years ago.
“West African regional production from Dangote Refinery has forced European petroleum product importers to compete to sell into the Nigerian market,” he stated.
He further suggested that Dangote Refinery could optimize operations by leveraging global crude sourcing strategies, potentially selling Nigerian crude oil while importing cheaper, low-sulfur crude from countries like the U.S., Brazil, and Angola.
“WTI crude from the U.S. is light, low in sulfur, and significantly cheaper than Nigerian grades, making it a viable refining option,” he explained.
While acknowledging the benefits of securing Nigerian crude in naira, Gooder cautioned that this does not necessarily translate to lower petroleum product prices, as NNPC retains the flexibility to sell crude internationally at a discount.
Engr. Mark Williams, a petroleum refining expert, who also delivered an in-depth presentation on the fundamentals of refining crude oil, called on the NMDPRA to fulfill its mandate by restricting petroleum products from topping refineries (artisanal refineries).
According to him, only products that meet the required specifications to address lead and sulphur content in petrol, diesel, and heavy fuel oil, should be allowed in circulation.
The expert said, “Petroleum products from topping refineries come from facilities with the simplest configurations, lacking product treatment and basic support operations.
“These types of refineries are no longer in use because they cannot meet the specifications required by regulatory authorities in Nigeria and globally.”
“Why products from these refineries are still being allowed in the market permitted remains a mystery.
“The only justification for allowing them to exist is to produce products that can be exported to conversion refineries, where they can be blended to meet commercially viable specifications,” Williams said.
He further noted that, “Sulphur is a contaminant. When such products are used as fuel for vehicles, they emit Sulphur Oxide, which is highly poisonous to human health.
“Back in the 1970s and 1980s, the Sulphur content in diesel could be as high as 5000 ppm. Today, this has been reduced to 10 ppm.”
Engr. Williams noted, “This is why products produced by NNPC refineries still fall within the range of 300 to 400 ppm. That is why the company is upgrading its plants to meet the AFRI-5 standard of 50 ppm maximum.”
