More troubles for Dangote over fresh regulatory hurdles 

...as new NMDPRA boss may continue with import license policy 

Africa’s richest man, Alhaji Dangote Dangote, may have won a major battle against the powerful cabal in the nation’s oil and gas sector reportedly working against his interests in the industry with last week’s sacking of the heads of two of the industry’s regulatory bodies, his battles are far from over, Business Hallmark can report.

His major misconception and misunderstanding of the situation in the sector is assuming that the regulators were acting on their own volition, but BH can report that the real issue is with the presidency, where some hawks are bent on frustrating him on the basis of anti-monopolist advocacy.

Hence, the abrupt removal of the two regulators was to reduce tension and divert attention from the allegations of corruption against them, which is of undermine the government already battered image on account of insecurity and Christian genocide. The two regulators may have already completed their tour of duty of four years in the saddle having been appointed in 2021. They had nothing to lose except being reappointed for second term.

The 650,000 barrels per day refinery established by the Kano-born billionaire in the Ibeju-Lekki area of Lagos will likely face more hurdles from the continued implementation of the Petroleum Industry Act (PIA), as signed into law, even with the change of leadership at the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

According to BH findings, the extant laws governing the nation’s midstream and downstream petroleum industry, apart from being opened to direct manipulations by selfish public officials, are inimical to the growth of local refiners, as presently drafted.

PIA Against Local Refineries

It would be recalled that the embattled NMDPRA chief executive officer, Farouk Ahmed and his NUPRC counterpart, Gbenga Komolafe, had last week resigned their appointments, as the helmsmen of the two regulatory bodies following a public outburst against Farouk by Aliko Dangote.

Dangote, on Sunday, 14th December, 2025, by accusing Farouk Ahmed of living beyond his legitimate means, citing about $7 million allegedly spent on overseas schooling for his four children.

In the same statement by the Presidency announcing the resignation of Farouk and Komolafe, President Bola Tinubu named Saidu Aliyu Mohammed and Oritsemeyiwa Amanorisewo Eyesan respectively as their replacements.

A chemical engineering graduate of the Ahmadu Bello University (ABU), Zaria, Mohammed previously led the Kaduna Refining and Petrochemical Company and the Nigerian Gas Company, and currently serves as an independent non-executive director at Seplat Energy, while Eyesan, an economist and former executive vice president at the NNPC, brings more than three decades of upstream sector experience.

The presidency described the new nominees as experienced professionals capable of restoring confidence in Nigeria’s oil and gas governance.

However, while the sacking of Farouk and Komolafe will be good news for Dangote and local refiners, indigenous refineries will continue to contend with massive fuel importation and unavailability of crude oil, unless parts of the PIA, as presently drafted, are amended.

According to BH findings, the Petroleum Industry Act 2021 signed into law by former President Muhammadu Buhari, empowers the midstream and downstream oil and gas sector regulator to address potential shortages by allowing authorized refiners and  marketers to import fuel.

The original PIB before it was eventually passed into law had allowed only active refinery licence holders, including Dangote Oil Refinery Company; BUA Refinery and Petrochemicals; Niger Delta Petroleum Resources; Waltersmith Refining and Petrochemical Company Limited, Edo Refinery and Petrochemical Company Limited; OPAC Refineries and other to import petroleum products.

According to Subsection (8) of Section 317 of the original PIB obtained by BH, the Nigerian Midstream and Downstream Petroleum Regulatory Authority “shall apply the backward integration policy in the downstream petroleum sector to encourage investment in local refining.

“To support this, licence to import any product shortfalls shall be assigned only to companies with active local refining licences. Import volume to be allocated between participants based on their respective production in the preceding quarter.

“Such import to be done under NNPC Limited Direct Sale/Direct Purchase scheme is to safeguard the health of Nigerians, as imported petroleum products shall conform to the Afri-5 specification (50ppm sulphur) as per the ECOWAS declaration of February 2020 on adoption of the Afri-Fuels Roadmap.”

Self-defeating Law

However, dependable sources informed our correspondent that due to extreme pressure from powerful interests in the nation’s oil and gas sector, including fuel marketers and unions, investors that funded the construction of oil depots and petroleum tank farms, as well as the Trade Union Congress of Nigeria (TUC), the last Senate inserted a provision in the Petroleum Industry Bill that paved the way for other players in the downstream sector to be involved in importation.

Section 317(9) of the passed and assented to Petroleum Industry Act (PIA) obtained by BH now allows the NMDPRA to grant import licenses to companies with active local refining licenses or a proven track record of international crude oil and petroleum products trading for product shortfalls.

Sources in the Petroleum industry told BH that it’s this loophole that was employed by the Farouk-led NMDPRA to grant continued  licences to importers to bring refined fuel into the country, despite Dangote’s persistent claims of producing more than enough to meet local demand.

Apart from his battles with the NMDPRA, Dangote also had many face offs with the NUPRC over allegations of denying his facility crude and selling to him at rates above international prices.

Despite Dangote’s accusations against the NUPRC, BH findings revealed that his chances of getting the required feed-stocks locally are very low. The sharing formula of crude oil and gas production in the country is presently 51 percent to 49 percent in favor of the Federal Government.

As a result, the government’s appointed body in charge of crude allocation, the NUPRC, can only sell it allocation of 51 perc.nt to local refiners

To further worsen the situation, the NNPCL had mortgaged more than 50 percent of the country’s oil share through ‘crude for loan’ deals. As a result, Dangote refinery will continue to rely largely on imported crude, especially from the United States, if he wants to remain in business.

To further compound his troubles, it is practically impossible to secure cheaper crude locally as cost of the product, whether supplied locally or in naira, is priced according to the international benchmark.

Nigeria also produces oil grades that are the best in the world like Bonny Light, Agbami, Qua Ibo and Brass River, which sell at a premium of about $3 to $4 above the UK’s Brent.

Cutting Nose to Spite face

Meanwhile, several industry stakeholders have continued to wade into the matter. Some of the experts agreed that fuel importation will continue to be attractive as long as Dangote’s fuel remained expensive.

The experts argued that while they are totally in support of local players, they also grudgingly support the continued importation of petrol as a check to possible Dangote’s exploitation as the  only supplier of refined products.

“The two (Dangote and importers are capitalists. They cannot be left alone unchecked. If you can recall, the prices of imported petrol and diesel climbed to a high of N1,400 and N1,900 respectively, before Dangote Refinery’s commissioning in 2024 helped to crash prices of both commodities to below N1,000.

“I believe that had that Dangote alone is  supplying Nigeria’s fuel needs, he would have acted in the same way by inflating prices of his products.

“So, whether he (Dangote)  likes it or not, the competition from importers is good for consumers, who are benefiting from petrol price wars.

“We can then consider ending fuel importation when major refineries like BUA, that are still under construction and can check price manipulations by Dangote before coming on board,” said Dr. Poju Oladele, an oil and gas consultant based in Lagos.

Also speaking, a media and communications expert, Zayyad Mohammed, said Dangote still has many battles to fight despite the exit of Farouk.

Monopoly and Nation Interest

“The Petroleum Industry Act (PIA) 2021 does not prohibit the importation of petroleum products into Nigeria. There is no outright ban; rather, the Act supports a deregulated market with regulatory oversight governing imports.

“Dangote’s grievance with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) under Engr. Farouk Ahmed centers on the continued issuance of import licences to petroleum marketers. And the failure to impose heavy levies and taxes on imported petroleum products.

“According to the NMDPRA, Nigeria’s petrol imports increased to an average of 52.1 million litres per day in November 2025.

“NMDPRA further disclosed that the NNPC imported the bulk of Nigeria’s petrol requirements in November 2025, with total imports by all marketers amounting to 1.563 billion litres during the month.

“In the first round of this battle, Dangote appears to have won, as President Bola Ahmed Tinubu has replaced Engr. Farouk Ahmed of the NMDPRA and Gbenga Komolafe of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

“They have been succeeded by Oritsemeyiwa Amanorisewo Eyesan as Chief Executive Officer of the NUPRC and Engr. Saidu Aliyu Mohammed as Chief Executive Officer of the NMDPRA.

“The bottom line is that this battle will continue. The new chief executives cannot outrightly ban the importation of petroleum products by the NNPC or other marketers, because there is no law to back them.

“However, they are likely to engage Dangote cautiously to avoid the fate that befell Farouk Ahmed and Gbenga Komolafe.

Pricing is Critical

“If Dangote truly seeks full market patronage, pricing is key. His products must match or beat the cost of imported petroleum products.

“Marketers operate on a simple philosophy: buy good, sell good. If Dangote Refinery’s prices and processes are competitive or superior to imported products, no marketer would endure the challenges of sourcing foreign exchange, freight costs, and time delays when a cheaper and readily available alternative exists at their doorstep”, Mohammed noted.

Also speaking, the Senior Partner, Commercial and Energy Law Practice, CANDELP, Mr. Isreal Aye said the Nigerians may not see an end to the importation of petroleum products anytime soon.

“The crafters of the law had envisaged a situation whereby refineries in the country may experience a downtime due to maintenance or a mechanical fault that will affect its operations.

“At such time, the regulator will enforce the clause as contained in section 317(9) to bridge the shortfall pending when the refinery comes back on stream.

“We cannot stop the importation of fuel now until we have about three to four functioning refineries. We cannot have our energy security in the hands of one person, that’s what the forner NMDPRA chief executive was trying to say some time agol.”

The CANDELP executive maintained that it’s not feasible that the Dangote refinery would continue to crash petroleum products prices without corresponding market factors.