The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recently granted petrol import permits to six depot owners and petroleum marketers. While this move may foster competition and stabilise the national petroleum market, experts argue that granting licences only to a selected group of depot owners could encourage favouritism and unfair advantages for well-connected insiders.
The Federal Government intended this decision to balance the downstream sector after suspending petrol import licences for two consecutive months. While the NMDPRA previously claimed that local production met domestic demand, the regulatory body recently authorised six importers to bring in approximately 30,000 tonnes of fuel each. The intervention seeks to mitigate the impact of Middle East conflicts, which recently pushed pump prices from ₦774 to ₦1,300 per litre.
Until this shift, the Dangote Petroleum Refinery served as Nigeria’s sole petrol producer, as most modular refineries in the country focus on diesel. Data from February 2026 reveals a tightening market where average daily consumption fell to 56.9 million litres, down from 60.2 million in January. During this period, the Dangote Refinery supplied 36.5 million litres of petrol and 8 million litres of diesel. This created a daily deficit of 20 million litres that the market covered using previously imported stock.
The Crude Oil Refineries Association of Nigeria (CORAN) confirmed that the government prioritised local output in the previous months, with domestic refining supplying over 36 million litres daily while imports contributed only 3 million litres.
Experts raise significant concerns regarding the risks of a single-source supply model and have flagged the decision to grant licences to only a few selected depots. While some argue a total suspension of imports would be preferable, this is not the first time the Nigerian government has adopted such a restrictive strategy. In 2020, the government banned maize imports to force local production. When the consequences spiralled, causing costs to rise and deepening food insecurity, the government eventually granted four companies approval to import maize.
However, studies indicate that such moves barely cushion the negative effects. Instead, they often allow the government to exercise favouritism, benefiting a few well-connected players at the expense of the wider market. Research notes that “policies like import restriction have not led to growth in Nigeria’s agricultural sector; it further increased cost for medium to large-scale farmers and inflation.”
Ultimately, limiting import access to a select group risks repeating these past failures by stifling the very competition the NMDPRA aims to create.
The Dangers of Monopoly
Beyond the effects of selective licences, industry experts have raised an alarm regarding the dangers of a single-source model, which fosters a culture of monopoly.
The Energy Transparency and Market Justice Initiative (ETMJI) warned that these permits could drain foreign exchange reserves and disrupt naira reforms, but many analysts argue that withholding licences to protect a domestic player does a disservice to consumers. Research indicates that monopolies often lead to higher prices, lower output, and reduced quality of both goods and services.
Another danger of selective licensing is that it incentivises monopoly. An analysis by PUNCH suggests that monopolies rarely occur by accident; they often emerge from policy decisions and weak government oversight. It follows the propensity that a diversified market remains essential to ensure the flow of resources that is fair and efficient for all citizens.
Jeremiah Olatide, Chief Executive Officer of Petroleumprice.ng, echoed these concerns regarding energy security. He said “relying on the Dangote refinery to supply an average of 50 million litres daily, in tune with 90 percent of our daily consumption, is a complete energy risk,” he said. “Competition must be natural. It must be allowed in an economy like Nigeria. We have over 200 million Nigerians who consume around 70 million litres of petroleum products on a daily basis. Any little glitch from the Dangote refinery might pose an energy crisis and even a security crisis for the country.”
