States urged to revive modular refineries amid monopoly fears

The Lagos Chamber of Commerce and Trade has urged state governments to rehabilitate current state-owned modular refineries and encourage extra refining initiatives to deepen competitors in Nigeria’s downstream petroleum sector.

The chamber acknowledged that rising the variety of operational refineries would assist reasonable petrol costs naturally and alleviate issues about market dominance. This follows an earlier report by The PidomNigeria that the Dangote Petroleum Refinery equipped over 90 per cent of the petrol consumed within the nation in February.

In keeping with figures launched within the February 2026 truth sheet by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, native refineries equipped roughly 36.5 million litres of Premium Motor Spirit day by day in February, whereas imports accounted for 3 million litres per day.

This introduced the overall nationwide day by day petrol provide to 39.5 million litres, with home refining accounting for about 92 per cent of the quantity after the Federal Authorities paused petrol imports.

In a phone interview with The PidomNigeria, the Director-Basic of the Lagos Chamber of Commerce and Trade, Dr Chinyere Almona, asserted that regulators should keep sturdy oversight of the market with out introducing value controls that might distort the sector.

The LCCI DG harassed that increasing native refining capability remained essentially the most sustainable answer to pricing issues.

“From the Lagos Chamber of Commerce and Trade’s standpoint, the long-term answer is to encourage better native refining capability and market participation somewhat than imposing value caps. Nigeria consumes roughly 50 to 60 million litres of petrol day by day, and rising the variety of operational refineries, by modular refinery initiatives and the rehabilitation of current state-owned services, will deepen competitors and naturally reasonable costs,” Almona mentioned.

She counselled regulators to deal with making certain transparency and honest competitors available in the market, stating, “What’s extra applicable is powerful market regulation to make sure transparency and honest competitors.”

“There’s a want for regulatory oversight, however not essentially direct value management. With the Dangote Refinery reportedly supplying over 90 per cent of petrol within the home market in February, issues about potential market dominance are comprehensible,” Almona mentioned. “Nevertheless, Nigeria has already transitioned to a deregulated downstream petroleum market following the 2023 subsidy elimination, and reintroducing administrative value controls might distort the market, discourage personal funding, and recreate the gas shortage and subsidy burdens that traditionally characterised the sector.”

Almona added that the Nigerian Midstream and Downstream Petroleum Regulatory Authority ought to carefully monitor pricing frameworks to make sure that petrol costs mirror goal market fundamentals similar to international crude oil costs, change charge dynamics, refining prices, and distribution margins, whereas additionally stopping anti-competitive practices. “This sort of regulatory vigilance helps defend customers with out undermining the funding local weather,” Almona remarked.

LCCI’s DG added that strengthening competitors within the refining area would additionally assist Nigeria obtain long-term power safety.

“In essence, the precedence needs to be aggressive market improvement and clear regulation, not price-fixing. If Nigeria sustains this strategy, the nation can strengthen power safety, entice additional funding into refining, and finally place itself as a petroleum provide hub for West Africa. We have to deal with boosting provide to satisfy native demand, as market forces will all the time decide costs,” she mentioned.

In the meantime, members of the organised personal sector and economists have additionally warned the Federal Authorities towards reintroducing petrol value controls regardless of rising international power costs.

The Nationwide Vice President of the Nationwide Affiliation of Small-Scale Industrialists, Segun Kuti-George, mentioned international geopolitical tensions, somewhat than home market manipulation, have been answerable for the current strain on petrol costs.

“I’m not positive the federal government ought to reply by going again to the subsidy period on account of that. We should always not beneath any guise return to the oil subsidy period,” Kuti-George mentioned.

He added, “It’s nothing however the disaster within the Gulf area, the US-Iranian battle, which is a brief factor. For this reason crude costs have risen, not Dangote.”

Kuti-George, nevertheless, referred to as for measures that might cushion the impression of rising gas prices on Nigerians, including, “Crucial factor is that we have already got a refinery right here within the nation. The federal government ought to encourage others to construct extra refineries in order that we are able to have extra competitors.”

Equally, the Chief Government Officer of Financial Associates, Dr Ayo Teriba, warned the federal government towards making everlasting coverage modifications in response to a brief international disaster.

“You can’t, due to short-term crises, then take a long-term coverage resolution. No matter the federal government desires to do to cushion the shock of a battle outbreak that could be over in two weeks or one month needs to be restricted to short-term responses,” Teriba mentioned.

Teriba prompt non permanent reduction measures somewhat than structural coverage reversals. “We will announce a ‘US-Israeli-Iranian battle reduction’ to cushion the shock of that battle on power. No everlasting value modifications, no everlasting coverage modifications, maybe one month’s reduction for focused Nigerians who want safety towards the associated fee shock,” he mentioned.

Additionally talking, the Director of the Centre for the Promotion of Non-public Enterprise, Dr Muda Yusuf, warned that value controls might create distortions within the economic system. “Worth management shouldn’t be the way in which to go. It may be very arbitrary, and it will possibly trigger lots of distortions within the economic system,” Yusuf mentioned.

He suggested the federal government to as a substitute scale back regulatory prices imposed on refiners and gas suppliers. “The easiest way is for the federal government to offer concessions to those that are both refiners or suppliers or those that are producing the product. The Dangote Refinery administration just lately mentioned they pay about 46 totally different prices, and all of these items will find yourself as a part of the worth that they’ll cost on the pump,” he mentioned.

Yusuf additionally harassed the necessity for extra refineries to make sure competitors within the sector.

“We should always encourage extra refineries to be on the bottom in order that we now have extra competitors amongst refineries. If all of them are producing right here and subjected to the identical circumstances, then you’ll be able to start to speak a couple of stage taking part in discipline,” he added.