Aliko Dangote, Chairman of the Dangote Group, has said the Dangote Petroleum Refinery & Petrochemicals (DPRP), the parent of his $20 billion refinery, was not designed to rival the NNPC, which has traditionally controlled Nigeria’s fuel importation and retailing market.

He stated this during a courtesy visit to the Group Chief Executive Officer (GCEO) of NNPC Ltd., Mr. Bashir Bayo Ojulari, at the NNPC Towers in Abuja on Thursday.

“There is no competition between us. We are not here to compete with NNPC Ltd. NNPC is part and parcel of our business, and we are also part of NNPC. This is an era of cooperation between the two organizations,” Dangote was quoted to have said in a statement signed by NNPCL’s Chief Corporate Communications Officer, Olufemi O. Soneye, on Friday.

Dangote emphasized the importance of collaboration between his refinery and NNPC, noting that they are not competitors but partners in driving Nigeria’s energy transformation agenda.

However, an analysis by energy and economic expert Kelvin Emmanuel has given a new context to the statement, asserting that the state-owned Nigerian National Petroleum Company Limited (NNPC) does not, in the first place, have the capacity to compete with Dangote Refinery.

Emmanuel argued that the Dangote Refinery is currently the only facility in Nigeria that is genuinely refining Premium Motor Spirit (PMS), also known as petrol.

Speaking on Channels Television’s Morning Brief, Emmanuel dismantled claims that the NNPC’s own refineries, located in Kaduna, Warri, and Port Harcourt, are now operational or refining petrol, calling the narrative a façade built on blending, not actual refining.

“I’ve always said it, and I stand by it: the only refinery in Nigeria producing PMS is Dangote. Dangote is doing 44 million liters of PMS on a daily basis,” Emmanuel stated.

“In contrast, NNPC is not refining PMS – they are only blending,” he added.

The Illusion of Refinery Revamp

Kelvin Emmanuel pointedly dismissed government claims about the revival of Nigeria’s four main state-owned refineries — Port Harcourt (two units), Warri, and Kaduna — calling their purported activity “window dressing.” According to him, what is being described as refining is, at best, blending operations involving imported naphtha and other components to mimic petrol production.

He explained that in places like Warri, though there exists a catalytic reforming unit, a critical component for PMS production, it is not functional. Without it, the refinery cannot convert naphtha into higher distillates such as PMS. This same limitation, he noted, applies in Port Harcourt as well.

“You can produce naphtha, but you can’t break it into higher distillates like PMS. The same thing applies in Port Harcourt,” Emmanuel said.

“What they were doing was they barge C5 raciness to the refinery, blend with naphtha, condense it and call it PMS,” he added.

NMDPRA Data Confirms Non-Production

Backing his claims with regulatory data, Emmanuel referenced the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), which, according to him, shows that no PMS is currently being produced by the state-run refineries. The government’s narrative of rejuvenation, he said, fails to align with the operational realities on the ground.

He broke down the refining capacities of Nigeria’s major refineries as follows:

• Port Harcourt Refinery: 60,000 barrels per day (old unit), 150,000 bpd (new unit)
• Warri Refinery: 125,000 bpd
• Kaduna Refinery: 110,000 bpd (50,000 and 60,000 bpd across two CDUs)

Despite these capacities, Emmanuel said none of these facilities is actively refining petrol, effectively ruling them out as competitors in a sector where the Dangote Refinery has already ramped up PMS production to 44 million liters per day.

“The government-owned refineries are not doing what they are supposed to do,” he said.

He also listed modular refineries such as Arabel (Rivers State), Walter Smith, DuPont Mainstream, and OPAC, each producing on a very small scale (ranging from 1,000 to 11,000 barrels per day), as incapable of meeting the nation’s PMS demand.

Why NNPC Cannot Compete

By failing to fix or replace its moribund refining infrastructure, the NNPC has effectively placed itself at a disadvantage. With its historical dependence on importation and its ongoing fuel blending strategy (as opposed to full-spectrum refining), the state oil company is bearing the challenge of exorbitant and fluctuating FX rates.

In April 2025, Dangote Refinery cut the ex-depot price of PMS to N835 per liter, marking its second price reduction within one week. The move sent ripples through the market and forced NNPC to respond with price cuts of its own—N880 per liter in Lagos, and N935 in Abuja. But the difference is not lost on analysts or petroleum marketers.

The NNPC’s inability to go toe-to-toe with Dangote is largely tied to landing cost, which refers to the total cost of getting petrol into Nigeria, inclusive of international purchase, shipping, insurance, port charges, and internal logistics. As of November 2024, data showed that the 30-day average landing cost had climbed to N977 per liter. In December, it fell marginally to N970, and in spot transactions, it hovered around N938 per liter.

That means every liter of petrol brought in by NNPC costs close to or above N970 before it even reaches filling stations. When the same company then sells petrol at N880 or N935, the numbers don’t add up without assuming losses or state-backed cost absorption.

Flawed Hydrocarbon Framework

Emmanuel did not stop at refinery performance. He also took aim at the broader structural problems within Nigeria’s oil sector, particularly the lack of a hydrocarbon accounting framework — a mechanism designed to track and measure oil production volumes and revenues in real time.

“I’ll say that the Nigerian government today does not have an accurate estimate of the amount of crude oil that comes to surface,” he said. “Nigeria is one of the few crude oil-producing countries in the world without a hydrocarbon accounting framework.”

Such a framework, he explained, would allow the Ministry of Finance and the Ministry of Petroleum Resources to independently verify actual volumes of crude oil produced, exported, or used for local refining. The Petroleum Industry Act (PIA), particularly Section 69, mandates this through Geographic Information System (GIS) mapping and installation of meters at wellheads, aggregation pipes, and pipelines.

“The hydrocarbon accounting framework is not just a spreadsheet,” Emmanuel emphasized, pointing to the need for a more technologically grounded infrastructure.

A $450 Million Question

Emmanuel further cited the example of a private firm licensed by the federal government and supplied crude oil by the NNPC to raise $450 million in upfront funding to rehabilitate a refinery — a plan that ultimately collapsed. According to him, the approval by the Federal Executive Council (FEC) in 2021 to spend that amount on turnaround maintenance could have been better used to build a brand-new refinery altogether.

This, he said, exposes a long history of waste, corruption, and poor strategic thinking in Nigeria’s oil sector — one that has eroded the NNPC’s ability to genuinely play in the refining space or position itself as a competitor to the Dangote Refinery.