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In August 2025, Aliko Dangote’s refinery is expected to begin nationwide distribution of refined petrol and diesel products from his $20 billion refinery located in Lagos, directly to fuel stations, manufacturers, telecoms firms, and other large users, which will partially eliminate the middlemen (oil marketers) who have been accused of unjustly inflating fuel price for years.
With his newly acquired fleet of over 4,000 compressed natural gas (CNG) tankers and the construction of more than 100 CNG refuelling stations across Nigeria, this marks the first time a single private entity will control such a comprehensive segment of Nigeria’s downstream oil supply chain.
However, while this development represents a leap forward in industrial capacity and supply chain integration, it has also reignited an old and unresolved debate that has long followed Aliko Dangote: accusations of being a monopolist.
The Petroleum Retail Outlet Owners Association of Nigeria (PETROAN) has been at the forefront of opposition. Its president, Billy Gillis Harry, described the move as a direct threat to thousands of independent fuel retailers. “He’s trying to wipe us out,” he said in an interview.
At the core of their concern is the fear that Dangote’s vertical integration, from refining to transport to retail, will marginalise existing players, inflate barriers to entry, and eliminate competition.
Yet, this narrative is only half the story.
Dangote refinery acquired 4000 CNG tankers to disrupt the downstream sector. Image source: National Record.
The vacuum Dangote fills
To understand the significance of Dangote’s move, it is essential to appreciate the broader context of Nigeria’s energy infrastructure. For decades, the country, despite being one of the world’s largest oil producers, has been dependent on imported petroleum products. This dependency, exacerbated by forex volatility, corruption, and regulatory uncertainty, has kept pump prices high and supply unreliable.
Dangote stepped into this gap. His 650,000 barrels-per-day refinery is not only the largest single-train refinery in the world, but it is also designed to meet all of Nigeria’s refined petroleum needs and produce a surplus for export. The refinery includes a 435 MW power plant, a deep-sea port, and a fertiliser plant, all of which are privately financed.
Economist Kelvin Emmanuel, speaking in an interview on Arise TV, argues that Dangote’s role is less about domination and more about solving problems successive governments have repeatedly failed to fix. “Dangote is not the regulator,” he said. “He is stepping into a space where the state has failed.”
Vertical integration vs monopoly
Dangote’s influence indeed spans key sectors in Nigeria. In the cement industry, he controls over 60% of the market. Lafarge Africa holds around 22%, and BUA Cement holds the remaining share. His company is also a major player in sugar, salt, fertiliser, and now, fuel.
However, a monopoly is not defined by dominance alone, it is characterised by the abuse of that dominance, the suppression of competition, and the control of prices without effective checks.
What Dangote has built is a vertical integration system, where production, logistics, and distribution are all aligned under one roof. In theory, vertical integration leads to efficiency, lower costs, and stronger supply chains. In practice, it can become problematic when regulators are too weak to ensure accountability.
The case of diesel pricing offers insight. After Dangote’s refinery began supplying diesel in the first quarter of 2025, prices fell from over ₦1,200 per litre to around ₦1000. That development forced the state oil firm, Nigerian National Petroleum Corporation (NNPC), and other traders to match the price. Rather than price-gouging, the entry of Dangote introduced competition to a previously import-reliant market.
In the same vein, according to data from the National Bureau of Statistics (NBS) as of June 12, Nigeria’s fuel importation decreased by 54 per cent year-on-year, primarily due to the increased domestic supply from the Dangote Petroleum Refinery. The report revealed that Nigeria’s petrol import bill dropped to $1.2 billion in the first quarter of 2025, representing a decrease from $2.6 billion in Q1 2024.
Yet, even this example is double-edged. If competitors are unable to match Dangote’s scale or access to logistics, they may not survive long enough to offer alternatives. In such a scenario, prices could be lowered to win market share, then raised when competition no longer exists.
The case for local investment
If Dangote’s power provokes discomfort, his investment history commands attention. While many of Nigeria’s elites have preferred to invest abroad – often in real estate in London, Dubai, or offshore banking centres – Dangote has done the opposite. He has reinvested over $25 billion into Nigerian and African infrastructure over the past decade.
Aside from the refinery and fertiliser plant in Nigeria, his cement plants span Nigeria, Senegal, Ethiopia, South Africa, Zambia, and Tanzania. He privately funded the rehabilitation of the Oshodi–Apapa Expressway, one of Lagos’ most vital transport arteries. His companies employ tens of thousands directly and hundreds of thousands indirectly.
This is not typical of African capital behaviour. Dangote’s operations bring industrial scale, job creation, and, arguably, a model for African-owned infrastructure development. At the UN General Assembly, he declared, “Africa must industrialise, and I believe we have to lead it ourselves.”
This mindset contrasts sharply with that of other high-net-worth individuals on the continent who prefer the safety of dollar assets and Western markets.
The risk of overconcentration
Still, even industrial heroism must be scrutinised. Dangote’s empire, as expansive as it is, presents national risk. If oil prices fall, if geopolitical shifts alter energy demand, or if domestic policy missteps occur, the implications for the Nigerian economy could be widespread.
As Kelvin Emmanuel pointed out, “If you concentrate capital like this, you’re not just risking the business—you’re risking the macroeconomy.”
There are also social and environmental concerns. Communities surrounding the Lekki Free Trade Zone have raised concerns about displacement, pollution, and a lack of consultation. While Dangote Group has promised corporate social responsibility programs, transparency in execution remains uneven.
A regulatory crossroads
The Dangote refinery’s nationwide fuel distribution plan is not just a business story but a test of governance. Nigeria’s Petroleum Industry Act (PIA) provides a framework for liberalised pricing and market oversight, but enforcement is weak.
What Nigeria needs now is:
Strong competition law enforcement to prevent anti-competitive practices.
Transparent pricing mechanisms that allow for fair market access.
Infrastructure access policies that prevent supply bottlenecks.
Environmental and social safeguards for communities affected by industrial projects.
This is not a monopoly
It’s understandable why Dangote’s rise and continued dominance concern Nigerians, but perhaps that concern is misplaced. What his market influence reveals is the absence of others who aren’t willing to take the scale of risks Africa’s richest man has taken and still takes.
His dominance in multiple sectors is both a sign of ambition and a vacuum. He builds because others do not. He invests because others hoard. He supplies because the state cannot.
Dangote is undoubtedly solving major socio-economic problems in Nigeria, and unless the government strengthen regulations and enforces a fair market environment, Nigeria’s economy risks being under the control of one man or a few. THIS IS NOT DANGOTE’S JOB.
This is not an argument for unchecked power, but rather an argument for understanding the origins of that power and building a robust regulatory system that tames it.
To check Dangote, Nigeria does not need to shrink him; it needs to grow the institutions that surround him. More potent regulators, fairer markets, more innovative policies. If that happens, Dangote will be one major player among many, not a monopolist, but a catalyst.
Until then, he remains the most consequential figure in Nigeria’s industrial landscape—a controversial, dominant, and perhaps indispensable one.
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