Nigeria’s petrol market is entering a new phase of competition as rising imports challenge domestic refining capacity, with Dangote Petroleum Refinery now considering restricting supplies to major marketers that continue to import Premium Motor Spirit.
The proposed restriction, which could begin this week subject to further consultations, comes after imported petrol accounted for about 43.3 per cent of Nigeria’s average daily petrol supply in July, according to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
The figures show how quickly the balance has shifted. Nigeria received an average of 45.5 million litres of petrol daily in July, down from 50.6 million litres in June. Of that July supply, domestic receipts fell to 25.8 million litres per day, while imports rose to 19.7 million litres.
That means imports supplied roughly 43 per cent of the petrol received by the Nigerian market in July, leaving locally refined petrol with about 57 per cent.
The development is significant because it comes barely two years after the start of operations at the Dangote refinery, which was expected to substantially reduce Nigeria’s historic dependence on imported refined petroleum products.
Dangote Refinery has a nameplate refining capacity of 650,000 barrels per day, although the facility has subsequently demonstrated production capability around the 700,000 barrels per day level during test runs.
NMDPRA data show that the increase in petrol imports did not happen in isolation.
Daily imports jumped from 5.9 million litres in May to 18.1 million litres in June, an increase of about 207 per cent. They rose again to 19.7 million litres in July. Over the same period, domestic petrol supply declined from 47.4 million litres per day in May to 32.5 million litres in June and 25.8 million litres in July.
The July figures therefore do not establish that Nigeria lacked refining capacity. They show that the volume of locally supplied petrol reaching the market declined while imported supply increased.
That distinction is important in assessing the emerging dispute between refiners and marketers.
Dangote has argued that continued imports create uncertainty over how much of its petrol the domestic market can absorb. The refinery recently said imported PMS represented approximately 43 per cent of July supply and warned that maintaining large inventories becomes commercially difficult when future import volumes are uncertain.
According to the refinery, excess petrol that cannot be absorbed domestically may have to be exported instead.
The latest proposal to restrict supplies to marketers who continue importing petrol takes that argument further. The refinery is now raising concerns not only about competition but also about product traceability and quality.
Sources familiar with the refinery’s position allege that some marketers blend imported petrol with products purchased from Dangote before distributing the mixture. The refinery says this could make it difficult to determine which products originated from the plant and which were subsequently blended or handled outside its control.
Those allegations have not been independently established, and they should not be treated as evidence that imported petrol in Nigeria is generally substandard.
Nigeria’s downstream petroleum sector is undergoing a structural change following the removal of the petrol subsidy and the emergence of significant private refining capacity.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority maintains a formal petroleum product import permit system, meaning imports remain part of the regulated market rather than being inherently prohibited.
The central regulatory question is therefore becoming whether imports are filling genuine supply gaps or competing with available domestic production.
That question has become more pressing because Nigeria is simultaneously exporting substantially more refined petroleum products.
The US Energy Information Administration reported that Nigeria’s seaborne petroleum product exports averaged 561,000 barrels per day in the second quarter of 2026, compared with an annual average of 79,000 barrels per day in 2023. The sharp increase has been linked largely to the emergence of the Dangote refinery.
At the same time, crude supply to domestic refineries remains an important part of the equation. NUPRC’s second quarter 2026 Domestic Crude Supply Obligation report showed that Dangote required 63 million barrels during the quarter and producers offered 68.1 million barrels, but the refinery ultimately accepted 52.6 million barrels.
This means the domestic refining story cannot be reduced simply to refinery capacity. Crude availability, pricing, logistics, refinery utilisation, petrol demand, imports and distribution all affect how much locally refined fuel reaches consumers.
The proposed Dangote restriction does not, by itself, amount to a ban on petrol imports. Any broader change to the structure of the market would depend on regulatory decisions by the relevant authorities.
For consumers, the immediate issue is whether competition between imported and locally refined petrol improves supply reliability and price discovery, rather than whether one source automatically replaces the other.
For regulators, the growing import share raises questions about transparency around import permits, domestic supply volumes, product quality testing and the conditions under which imports are authorised.
For refiners and marketers, it exposes a more fundamental question about Nigeria’s post subsidy petrol market: how should competition work when domestic refining capacity is large enough to supply a substantial share of national demand, but imported products remain legally available?
The answer will determine whether Nigeria’s new refining capacity becomes the foundation of a more self sufficient petroleum market or operates alongside a permanently significant import trade.