Fix the messy energy sector

The fresh feud between the Dangote Group and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is a troubling reminder that Nigeria’s energy transition remains vulnerable to regulatory missteps and policy incoherence. At a time when the country desperately needs stability, investment and confidence in its petroleum sector, the protracted dispute is both unfortunate […]

The fresh feud between the Dangote Group and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is a troubling reminder that Nigeria’s energy transition remains vulnerable to regulatory missteps and policy incoherence. At a time when the country desperately needs stability, investment and confidence in its petroleum sector, the protracted dispute is both unfortunate and unnecessary.

This is not the first time Africa’s largest refinery and the downstream regulator have locked horns. Even before the Dangote Refinery commenced production, tensions had surfaced over licensing, import permits and product quality benchmarks. Last year, the refinery publicly accused regulators of frustrating its operations through what it described as inconsistent standards and preferential treatment for imported products. The NMDPRA, in turn, questioned the quality of some locally refined products, a move that triggered sharp rebuttals from the company and parts of the industry.

It is our view at Daily Trust that what should have been resolved quietly through regulatory engagement and technical verification instead played out in the public space, deepening mistrust. The latest episode suggests that little has changed. Rather than acting as a neutral referee, the regulator has repeatedly appeared enmeshed in controversy with the sector’s most consequential investor.

That posture is deeply problematic. A regulator’s role is to regulate, mediate and resolve disputes, not to become an actor in the feud. Once a regulator is perceived as combative or defensive, it undermines confidence not only in the institution but in the wider policy environment it represents.

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We also submit that the resignation of the head of the NMDPRA, Farouk Ahmed after the very salacious allegations from Aliko Dangote and what looked like a consequential exit of his counterpart in the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), Gbenga Komolafe, may calm immediate tensions, but it must not foreclose the substantive issues raised by Dangote and other industry stakeholders. Central among these is the question of whether Nigeria’s regulatory and policy framework genuinely supports local refining or merely pays lip service to it.

The Petroleum Industry Act was designed to promote efficiency, transparency and investment across the petroleum value chain. While it liberalised the downstream market and removed price controls, it also recognises the strategic importance of domestic refining. The Act empowers the government, through relevant authorities, to ensure energy security and optimise domestic utilisation of petroleum resources. In practice, however, this intent has often clashed with regulatory actions that appear indifferent or even hostile to local production.

One glaring gap is the absence of clear, enforceable provisions guaranteeing crude supply to domestic refineries. While the PIA allows for market-based crude sales, it does not sufficiently insulate local refiners from export-driven supply distortions. As a result, refiners are often forced to compete with international buyers for Nigerian crude, even as the country continues to import large volumes of refined products.

This contradiction lies at the heart of the Dangote dispute. A country that aspires to end fuel importation cannot afford a regulatory system that makes local refining commercially precarious. Regulation is essential, but when the process is flawed, opaque or poorly coordinated, it becomes a bottleneck. In such circumstances, the agency meant to facilitate development can easily turn into an obstacle.

There is therefore an urgent need to review both regulatory practice and aspects of the PIA itself. The Act should be amended to provide for special crude allocation to local refineries at transparent, market-reflective terms. Such a provision would not negate competition or promote monopoly; rather, it would acknowledge local refining as a strategic national priority, much like gas utilisation and domestic power supply.

This is not an argument for shielding any single player from scrutiny. The government must guard against monopolisation and ensure a level playing field. However, it must also be clear that regulatory agencies are not sabotaging local production, deliberately or otherwise. Importation should complement domestic output, not overwhelm it. Where local capacity exists, imports should be calibrated accordingly.

Failure to urgently resolve this feud carries broader implications. Investors, both local and foreign, are watching closely. Prolonged regulatory uncertainty and public institutional disputes send a damaging signal that Nigeria remains an unpredictable investment destination. That perception could deter future entrants into the refining sector and undermine the government’s stated objective of boosting local production and industrial self-sufficiency.

We also believe that Alhaji Aliko Dangote should have handled his personal scores with Engr. Faruq Ahmed better. Bringing in family matters in situations like this is not tidy.

Finally, the investigation by the Independent Corrupt Practices and Other Related Offences Commission (ICPC) into allegations against the former NMDPRA boss must be pursued to its logical conclusion. The allegations are serious and must not be swept aside in the name of administrative transition. Transparency demands that the findings be published and, where necessary, prosecution diligently pursued.

Handled properly, this moment offers an opportunity to sanitise the industry, strengthen regulation and align policy with Nigeria’s development goals. What the energy sector needs now is not brinkmanship, but decisive, fair and credible government action.