Nigeria’s refining revolution has a monopoly problem
Dangote has slashed fuel imports, but market concentration risks keeping the benefits from common Nigerians.
Nigeria marked a major economic milestone on September 14, 2026, with the opening of the initial public offering (IPO) of Dangote Petroleum Refinery, the largest IPO in African history. Located in the Lekki Free Zone in Lagos, the refinery now has a crude-processing capacity of 700,000 barrels per day, up from 650,000, and cost approximately $20bn to build. It was commissioned in May 2023, while production of diesel and jet fuel began in January 2024, followed by the start of petrol supplies to the local market in September that year.
At the opening of the IPO, Dangote Group president Aliko Dangote said: “We fully share all our prosperity with the people. That’s why we call this the ‘People’s IPO’.” Days earlier, as the IPO documents were signed, he had presented the refinery as part of a broader African industrial project: “The refinery means too much to our continent. We can’t industrialise if we don’t have energy security.”
The contrast with Nigeria’s state-owned refineries could hardly be starker. While construction of the Dangote Refinery was under way, the government-owned facilities in Port Harcourt, Warri and Kaduna continued to struggle amid allegations of corruption, weak operational capacity, chronic political interference and an overreliance on short-term contracting models. Over the past two decades, estimates of spending on rehabilitation and turnaround maintenance range from more than $18bn to as much as $25bn, yet the refineries have remained largely dormant or operated at negligible capacity for much of the past decade.
The severity of the cost-of-living crisis has also prompted questions about whether domestic refining is delivering genuine economic independence or merely replacing dependence on foreign suppliers with dependence on a dominant local producer. Such concerns have been reinforced by repeated public disputes since 2024 involving the Dangote refinery, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian National Petroleum Company (NNPC) over crude supply, fuel import licences and the rules governing the domestic market.