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Dangote faces price war as NNPC backs fuel imports

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The Nigerian National Petroleum Company Limited has told the Federal High Court sitting in Lagos that petroleum products from the Dangote Petroleum Refinery and Petrochemicals FZE are sold at “significantly high and fluctuating market prices”, warning that granting the refinery’s requests could hand it monopoly control of Nigeria’s downstream petroleum sector.

The national oil company stated this in a counter-affidavit in opposition to Dangote refinery’s originating summons in Suit No: FHC/L/CS/857/2026 before the Federal High Court, Lagos Judicial Division.

Similarly, marketers under the aegis of the Petroleum Products Retail Outlet Owners Association of Nigeria supported the NNPC, saying competition must be allowed in the petroleum sector to prevent what it called price exploitation, saying multiple sources privy would bring about a reduction in fuel prices.

In the counter-affidavit, a copy of which was obtained by our correspondent, the NNPC asked the court to dismiss or strike out the suit on grounds that it was incompetent, premature, disclosed no cause of action, and constituted an abuse of court process.

Dangote tackles importers

The PUNCH reports that the Dangote refinery had challenged the issuance of petrol import licences to marketers and the Nigerian National Petroleum Company Limited by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The PUNCH reports that the NMDPRA recently approved licences for the importation of over 700,000 metric tonnes of petrol despite claims that the Dangote refinery now supplies more than 90 per cent of the nation’s daily PMS consumption.

The Dangote refinery had dragged the Attorney-General and the NNPC before the court, asking it to void import permits granted by the NMDPRA to fuel importers, arguing that the licences violated existing regulations and an earlier court order to maintain the status quo.

Dangote had accused the NNPC and others of sabotaging the $20bn investment, especially by denying it crude supplies and resorting to fuel importation when it has the capacity to produce what the country needs in terms of petrol, diesel, and others.

NNPC responds

Responding, the NNPC said it would raise a preliminary objection challenging the competence of the suit and the refinery’s locus standi. “The plaintiff’s suit is premature; the plaintiff lacks locus standi,” the affidavit said.

The state oil company declared that Dangote refinery’s petroleum products were already expensive and subject to price swings dictated by commercial interests. “The plaintiff’s petroleum products are already sold at significantly high and fluctuating market prices, dictated by its commercial interests,” the company said.

NNPC accused the refinery of forum shopping, saying, ”The institution of multiple actions by the plaintiff in respect of substantially the same subject matter and reliefs constitutes an abuse of court process and amounts to forum shopping.”

The company argued that the Dangote refinery had earlier filed a similar action before the Abuja Judicial Division of the Federal High Court in Suit No. FHC/ABJ/CS/1324/2024 against the NMDPRA and six others over import licences and levies before later withdrawing the case and instituting another action in Lagos.

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NNPC maintained that there was no evidence showing the refinery could independently satisfy Nigeria’s petroleum product demand. “There is no credible, independent, or verifiable evidence before this honourable court establishing that the plaintiff presently satisfies the petroleum product demands of Nigeria,” NNPC argued.

The national oil company added that the refinery failed to provide independently verified evidence establishing the country’s actual daily consumption needs or proof of its ability to guarantee an uninterrupted nationwide supply.

“The plaintiff has failed to place before this Honourable Court any comprehensive or independently verified evidence establishing the actual daily national consumption rate of petroleum products in Nigeria or the plaintiff’s ability to guarantee uninterrupted nationwide petroleum supply independently,” it was said.

NNPC also argued that the refinery’s production claims were insufficient to justify restricting imports, stressing, “The plaintiff’s alleged production figures are selective, incomplete, and incapable of establishing nationwide product sufficiency.”

The company stressed that fuel supply obligations go beyond refining capacity alone, as they necessarily involve logistics, strategic storage, product evacuation, distribution, haulage, transportation, and strategic reserve management.

NNPC warned that depending on a single operator for national fuel supply would endanger Nigeria’s energy security. “Reliance on a single supplier within the petroleum industry poses grave risks to national energy security,” it was stated.

The company added that restricting imports in the manner sought by the refinery could trigger severe supply crises nationwide. “Restricting importation channels in the manner sought by the plaintiff would expose Nigeria to severe risks of petroleum shortages, supply disruptions, price instability, distribution failures, and national energy crises,” the affidavit read.

NNPC further told the court that any operational interruption, shutdown, or disruption affecting the Dangote refinery operations in Nigeria would result in severe petroleum shortages if alternative importation and supply channels are eliminated.

The company accused the refinery of attempting to edge out other participants in the downstream supply chain. It warned that granting the refinery’s requests could create monopoly control in the petroleum sector.

“The reliefs sought by the plaintiff are aimed at substantially restricting or eliminating other participants within the petroleum importation and supply chain. The grant of the plaintiff’s reliefs would effectively expose Nigeria’s petroleum sector to monopoly control and undermine competitive participation within the industry,” the affidavit stated.

NNPC warned the court that a monopoly in the sector would hurt consumers and destabilise the economy by distorting market competition, undermining pricing stability, reducing supply flexibility, and exposing the Nigerian economy to “substantial risks”.

The company defended the continued issuance of import licences by regulators, insisting they were lawful and necessary for energy security and market stability, saying this does not contravene Section 317(9) of the Petroleum Industry Act, 2021.

The oil company told the court that Section 317(8) of the PIA merely gave regulators discretionary powers regarding backward integration policy and did not impose a mandatory ban on imports.

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“Section 317(9) of the Petroleum Industry Act expressly contemplates the issuance of import licences to companies with active local refining licences or proven track records in international crude oil and petroleum products trading.

“Section 317(8) of the Petroleum Industry Act merely provides that the Authority may apply a Backwards Integration Policy in the downstream petroleum sector, thereby conferring discretionary powers on the regulatory authorities rather than imposing a mandatory prohibition on petroleum importation,” it added.

NNPC specifically defended the roles of the Nigerian Upstream Petroleum Regulatory Commission and the NMDPRA in the dispute, saying, “The 2nd Defendant, NMDPRA, NUPRC and other relevant agencies of government have not frustrated the plaintiff in the execution of its business objectives or refinery operations in any manner whatsoever.”

NNPC also denied allegations of sabotage and deliberate denial of crude oil supply to the refinery. “The government and the 2nd Defendant have not deliberately denied the plaintiff a crude oil supply,” the company stated.

It added, “Contrary to the plaintiff’s allegations, the 2nd Defendant has not sabotaged the plaintiff’s refinery operations.”

According to the affidavit, crude oil supply arrangements are influenced by “operational realities, commercial arrangements, security considerations, production levels, logistical constraints, and contractual obligations.”

The company insisted that all actions relating to importation, licensing, supply, and distribution were undertaken strictly in line with the Petroleum Industry Act, market realities, and national interest considerations.

NNPC further argued that the refinery was only one of several operators in the industry and could not override the rights of other participants, saying it is the supplier of last resort.

The latest court battle is the second significant legal confrontation yet between Dangote refinery and major government oil agencies since the commencement of operations at the multibillion-dollar Lekki-based refinery owned by billionaire businessman Aliko Dangote.

The Dangote refinery withdrew the 2024 suit following the Federal Government’s intervention. The dispute is rooted in disagreements over petroleum importation, crude oil supply arrangements, market competition, and the implementation of the Petroleum Industry Act following the deregulation of Nigeria’s downstream oil sector.

Since the removal of the petrol subsidy in 2023, fuel prices have been largely determined by market forces, forcing marketers, importers, refiners, and regulators into intense competition over supply control and pricing.

The Dangote refinery had once been attacked by some marketers over incessant petrol price reductions, which they said impacted their sales negatively. The refinery, which commenced petrol production in 2024 after years of delay and huge capital investment, has repeatedly pushed for stronger government support for local refining and restrictions on fuel imports, arguing that continued importation undermines domestic refining capacity.

The refinery had earlier accused regulatory authorities of issuing import licences despite local refining output being able to meet domestic demand.

However, NNPC, oil marketers, and regulators have consistently maintained that Nigeria still requires multiple supply channels because of distribution challenges, emergency supply considerations, strategic reserve obligations, and uncertainties surrounding nationwide consumption levels.

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Marketers back NNPC

It was gathered that the NMDPRA and some marketers are planning to join the suit.

Speaking, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, stated that while every corporate organisation has the constitutional right to seek legal redress, the downstream petroleum sector must continue to encourage healthy competition, market stability, and energy security in the overall interest of Nigerians.

According to him, competition remains a critical pillar “for ensuring product availability, price moderation, efficiency, and sustainability within the petroleum distribution value chain”.

He emphasised that Nigeria’s energy market must not be allowed to tilt towards monopoly, regardless of the scale of investment or refining capacity of any single operator.

The PETROAN boss reiterated that Nigeria’s downstream petroleum sector must remain open, competitive, and balanced in order to “prevent supply shocks and protect consumers from artificial scarcity or price exploitation”.

Gillis-Harry acknowledged the significant investment made by the Dangote refinery and commended its contribution to local refining capacity, job creation, and reduction in fuel import dependence.

However, he stressed that a liberalised downstream market remains essential, where multiple operators can function fairly under the regulatory supervision of the Federal Government. He said one of the benefits of healthy competition in the downstream petroleum sector is the “reduction in fuel prices through competitive pricing”.

He outlined the disadvantages of monopoly in the sector, including arbitrary and exploitative pricing, limited choices for consumers, and reduced efficiency due to a lack of competition.

Gillis-Harry, therefore, reaffirms that the issuance of import licences is not only lawful but also a regulatory necessity provided by law to prevent scarcity and ensure continuous fuel availability across Nigeria.

Refiners oppose imports

The Crude Oil Refineries Association of Nigeria had also challenged fuel importers and clashed with marketers over the continued importation of refined petroleum products.

The CORAN Publicity Secretary, Eche Idoko, recently told our correspondent that commitment to the sector should be measured by capital invested and long-term risk exposure, not trading activity.

“Who has truly demonstrated faith in Nigeria’s downstream sector—local refinery companies or petroleum importers? The answer is not ideological. It is grounded in evidence, capital behaviour, and long-term commitment,” CORAN stated.

The association said local refinery companies had demonstrated belief in Nigeria by committing capital to fixed industrial assets located within the country. “Local refinery companies—spanning large-scale, mid-scale, and modular refineries—have demonstrated belief in Nigeria’s downstream sector by committing capital to fixed industrial assets located within the country,” it said.

CORAN described refining as one of the most capital-intensive and risk-exposed segments of the petroleum value chain, saying investors must contend with construction and commissioning risk, crude oil supply uncertainty, foreign exchange volatility, power, logistics, and evacuation constraints, and regulatory and policy inconsistency.

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Nigerian states’ revenues rise 93%, but education spending drops — World Bank

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The World Bank says Nigeria’s 36 states recorded a 93 per cent increase in revenues between 2023 and 2025 but education received a declining share of the sector’s expenditure.

The bank disclosed this in its latest Nigeria Development Update, which examined how increased public revenues have influenced spending priorities across the federation.

The report was made available to the News Agency of Nigeria by the World Bank in Washington D.C.

According to the report, states’ aggregate revenues rose by approximately 93 per cent in real terms, while expenditure increased by 92 per cent during the period.

The report attributed the improvement partly to exchange-rate reforms, petrol subsidy removal, stronger revenue administration and increased allocations from the federation account.

It said states also benefited from refunds, settlement of longstanding federal obligations, intervention funds, and stronger Value Added Tax collections.

However, education’s share of total state expenditure declined from 14.9 per cent in 2021 to 12.1 per cent in 2025, according to the report.

Health expenditure remained broadly stable at approximately seven per cent, while social protection’s share increased from 1.4 per cent to 4.4 per cent.

The bank said capital expenditure increased significantly, accounting for 61 per cent of state spending, compared with 46 per cent previously.

Transport infrastructure recorded the largest increase, alongside substantial spending on housing, agriculture and other economic investments.

The report quoted Mathew Verghis, the World Bank Country Director for Nigeria, as saying that increased revenues provided the opportunity to improve infrastructure, education, healthcare, and water services.

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He said greater spending efficiency, accountability and improved service delivery were essential to ensuring that additional public resources benefited Nigerians.

The bank acknowledged improvements in states’ fiscal reporting, transparency and internally generated revenue.

It, however, stressed that stronger investment in human capital was necessary to translate economic reforms into sustainable employment and improved living standards.

The report also projected average economic growth of 4.4 per cent between 2026 and 2028, subject to sustained reforms and improved service delivery.

It urged federal and state authorities to ensure that increased public revenues translated into tangible improvements in Nigerians’ welfare.

NAN

Source: punchng.com

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Nigeria promotes investment without building production capacity – UNILAG don

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A professor of Comparative Political Economy at the University of Lagos, Adelaja Odukoya, has asserted that Nigeria’s economic policies promote investment without sufficiently strengthening domestic production.

Odukoya argued that the contradiction had weakened the country’s productive foundations, with policies encouraging investment and entrepreneurship while failing to create the technological capacity, productive employment and processing industries needed to drive sustainable development.

Odukoya spoke at the maiden edition of the Adeleke University Toyin Falola Annual Lecture, held on Thursday at the Performing Arts Theatre, Adeleke University, Ede.

The lecture had as its theme, “History, Power and Accumulation: Reimagining Africa in the Globally Disorderly Order.”

Odukoya identified several contradictions in the way the Nigerian state manages economic activity.

He said, “The state promotes investment without creating conditions for technological transfer. It encourages entrepreneurship without generating sufficient productive employment.

“It expands primary-product exports while leaving processing capacity undeveloped. It constructs infrastructure without establishing strong linkages with domestic production.”

According to him, the contradictions explain why increased economic activity and accumulation do not necessarily translate into development.

“Accumulation is not synonymous with development,” Odukoya stated.

He argued that genuine development should be measured by the expansion of productive, technological, institutional and human capabilities.

“A country could attract investment, export minerals and agricultural commodities and record economic activity while still failing to build the domestic industries and technological capabilities required for long-term development,” he said.

His argument was echoed by Prof Toyin Falola, who said Africa’s vast natural resources would continue to reinforce dependency unless governments developed the industrial, technological and institutional capacity to transform them into productive power.

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Falola said Africa’s resource problem was not simply one of historical exploitation, but also the continent’s failure to convert its resource endowments into power.

“The issue, however, is not just to repeat the history of exploitation. It is more important to know how Africa turns its great resources into power,” Falola said.

He argued that Africa could not afford to remain a spectator as global economic and geopolitical arrangements continued to change, stressing that resource ownership without the capacity to add value would not guarantee influence.

Falola said the continent required a combination of knowledge, government policy and industrial capacity to change its economic position.

“There must be universities that generate new knowledge; there must be governments that translate this knowledge into policies; there must be industries that add value to the continent’s natural resources,” he said.

He added that Africa needed more than improved infrastructure and stronger economies if it wanted to exercise greater influence in the global system.

“The future of the continent will require more than just better infrastructure, improved economies, and more effective political institutions,” Falola said.

Source: punchng.com

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Import waivers, insecurity end two-year agric trade surplus

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Import waivers meant to ease hunger and insecurity on farms have led to a deficit, ending a two-year run of surpluses, as Nigeria’s agricultural trade balance swung from a N740.27bn surplus in the first half of 2025 to a N56.13bn deficit in H1 2026, according to agriculture and trade experts.

Recent foreign trade data from the National Bureau of Statistics showed that agricultural exports fell by 33.28 per cent, or N985.14bn, to N1.98tn in H1 2026 from N2.96tn in H1 2025.

Agricultural imports fell by only 8.50 per cent, or N188.74bn, to N2.03tn from N2.22tn over the same period. The gap between the two movements produced a N796.40bn swing in the trade balance.

Nigeria recorded a N365.74bn deficit in H1 2023, when imports of N926.25bn far exceeded exports of N560.51bn. The balance then turned to a N194.92bn surplus in H1 2024 before it widened to N740.27bn in H1 2025.

In separate phone interviews with The PUNCH, Agribusiness experts, including the Chairman of the Lagos Chamber of Commerce and Industry’s Agricultural and Allied Group, Tunde Banjoko, explained that recent government policy led to the shift.

Banjoko said, “Some waivers were given for products like palm oil and rice, and the import tariffs were drastically reduced. It became more favourable for people to import than to patronise local producers.”

He said the waivers on food commodities hurt domestic producers, even though lower tariffs on tractors and manufacturing equipment helped them.

According to Banjoko, “The effect is that our imports will rise above our exports. Second, we will discourage local production. Thirdly, we will be reducing employment, because some factories will shut down if they are not able to compete.”

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Banjoko also said weak funding for processors compounds the problem. He said foreign direct investment flows mainly into the capital market rather than into production and processing, so local processors cannot scale.

He urged the Federal Government to speed up the Special Agro-Industrial Processing Zones programme. “We should speed up such projects where we can produce enough for our country and start exporting, not look for shortcuts by reducing prices,” Banjoko added.

Meanwhile, the Chief Executive Officer of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf, identified two major factors behind the deficit. He said the first was the Federal Government’s decision to allow some food imports to tackle runaway inflation.

Yusuf said, “The first is the decision of the government to allow for some food imports as a result of the challenges of food inflation, which at a point was getting almost completely out of hand.”

He added that insecurity worsened the supply gap and cut export capacity, stating, “Insecurity led many farmers to leave their farms. Many of them have ended up in IDP camps, and quite a number have completely abandoned farming.”

He added that farmers cannot export without output. Yusuf said, “You can only export when you have the output.”

Yusuf also said high input costs and falling produce prices have discouraged farming. He said, “Most of these inputs are imported, so the exchange rate situation has seriously affected the cost of inputs, and the prices of produce have gone down.”

He urged the Federal Government to cut the cost of fertiliser, agrochemicals, machinery and improved seedlings. He also called for a minimum guaranteed price for agricultural produce.

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Yusuf said, “The government can establish a threshold below which, if prices fall, it will give farmers some compensation. That is the way it is done in many other economies.”

Source: punchng.com

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