Aliko Dangote vs Nigerian Oil Regulators

Aliko Dangote vs Nigerian Oil Regulators

21.12.2025

The ongoing dispute between Aliko Dangote, Africa’s richest man, and the Nigerian Oil Regulators, specifically, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has brought to the forefront the intricate relationships between competition law, regulatory policies, and market structures, said Dr. Kelvin Kamayoyo, a Zambian economist and Researcher.

Further, Dangote has submitted a petition to the office of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), alleging that Farouk Ahmed, the former Head of the NMDPRA, spent over $7 million on the education of four of his children in Switzerland and requesting that he be investigated and prosecuted pursuant to Section 19 of the ICPC Act.

This being a matter of public policy and national interest, Nigeria’s House of Representatives has also elected to investigate the dispute, citing concerns over fuel supply, price volatility, and policy inconsistency. On the face of it, the regulators’ style of regulating the downstream oil industry is perceived to be protecting vested interests capable of undermining Nigeria’s energy security and eroding investor confidence.

More often than not, the current dispute between Dangote and Nigerian regulators is a classic case of power dynamics and may lead to the exposure of corrupt activities that are capable of inducing economic sabotage if not curbed. The regulators’ actions seem to be resting far from the much-desired local content promotion efforts, given their alleged insatiable appetite to enforce regulations that raise concerns among local oil producers.

Indisputably, if the regulators had embraced the spirit of the local content doctrine, they would have endeavoured to always work towards striking a balance between local supplies and foreign supplies through the introduction of absolute import quotas equivalent to the domestic production deficit. Import quotas would, in the interim, help to protect jobs in the oil industry and other associated industries and manage trade imbalances or stabilize domestic supply.

However, the regulators’ insensitivity to the local content doctrine and voracious regulatory actions only serve to protect the interests of importers and other players in the oil value chain, rather than prioritizing the country’s economic growth and broader consumer interests.

This article delves into the background of Dangote’s differences with oil regulators, explores the interplay between competition law and regulatory policies, and highlights the importance of maintaining fair market regulations and competition in an economy. The article further relies upon secondary data and is anchored on content analysis theory and phenomenology theory in order to synthesize the content and provide a narrative that is educative.

Dangote’s woes with Nigerian oil regulators stem from his efforts to dominate the oil market in Nigeria, a move perceived as threatening the interests of other market players (Adepetun, 2020, p. 1). The general principle surrounding dominance dictates that industries do entertain the existence of dominance but detest and often embrace statutes that prohibit the abuse of such a market position. For instance, in Nigeria, Abuse of Dominance is prohibited under Section 70 of the Federal Competition and Consumer Protection Act, 2018, by prohibiting firms or a single firm from engaging in practices such as predatory pricing, limiting production, and applying dissimilar conditions to equivalent transactions.

“Competition law and regulatory policies often find themselves at odds, with the former promoting market competition and the latter seeking to regulate market behavior” (Kovacic, 2017, p. 241). In Nigeria, the competition law, embodied in the Federal Competition and Consumer Protection Act (FCCPA) 2018, aims to promote competition, protect consumers, and prevent anti-competitive practices (FCCPC, 2018).

The situation Nigeria finds itself in today would have been avoided if the FCCPC had been proactive enough and elected to pursue a balance between safeguarding fair competition and promoting local content strategies.

A competitive market structure is characterized by multiple firms competing with each other, leading to an efficient allocation of resources and innovation (Mankiw, 2014). In contrast, a natural monopoly market structure, like the oil industry, is dominated by a single firm due to high fixed costs and economies of scale (Posner, 2014). It is still possible to have both a competitive market structure and a natural monopoly structure in a single economy and derive benefits.

Fair market regulations and competition are crucial for promoting economic efficiency, innovation, and consumer welfare (Stiglitz, 2017). In Nigeria, maintaining fair market regulations is essential for attracting investments, promoting entrepreneurship, and reducing poverty (Adeyemi, 2019).

Nigeria’s competition law, enforced by the Federal Competition and Consumer Protection Commission (FCCPC), aims to prevent anti-competitive practices and promote competition in the oil industry (FCCPC, 2018). However, the law’s effectiveness is often hampered by regulatory capture and corruption (Okonjo-Iweala, 2018). This may possibly explain why this dispute between Dangote and the Oil Regulators has gone on for so long.

Additionally, consumers in Nigeria often lack a strong voice, making them vulnerable to exploitation by firms and regulators (Adeyemi, 2019). The FCCPC has a mandate to protect consumer interests, but its effectiveness is limited by inadequate resources and regulatory capture (FCCPC, 2018).

The oil industry is crucial to the welfare of both the economy and the consumer in Nigeria, and as such, what is unfolding should be of interest to consumers, including consumer advocates.

Transparency and accountability are essential for promoting fair market regulations and preventing corruption (Stiglitz, 2017). In Nigeria, the lack of transparency and accountability has led to regulatory failures and undermined consumer welfare (Okonjo-Iweala, 2018).

Undeniably, transparency and accountability in every industry, including the oil industry in Nigeria, underpin good governance and greatly contribute to building trust and ensuring fairness, promoting efficiency, and preventing corruption, allowing investors and consumers to make informed decisions.

However, going by what is happening now in the Nigerian oil industry, it is clear that both transparency and accountability are under threat. It is without any doubt or hesitation that the Nigerian oil industry urgently needs to enhance transparency and accountability in order to foster ethical behaviour, restore regulatory confidence, and encourage long-term industry stability.

Regulators in Africa often fail to collaborate effectively with local indigenous investors, leading to missed opportunities for economic development (Adepetun, 2020). Dangote’s experience highlights the need for regulators to work with local investors to promote economic growth and development. To promote local investors, African governments should establish clear regulatory frameworks, provide access to finance, and promote transparency and accountability (Adeyemi, 2019). Regulators should also engage with local investors to better understand their needs and concerns.

The ongoing dispute reflects a broader structural problem in Nigeria’s oil sector, described as a continued reliance on a contract oil model that encourages exports of raw crude oil while importing refined products, thereby perpetuating economic dependency and unnecessarily exposing the country to exogenous shocks.

Additionally, the Dangote-oil regulator saga highlights the complexities of competition law and regulatory policies in Nigeria that could have been entrenched due to weak inter-institutional strict policy concurrence at the implementation stage. To promote fair market regulations and competition, Nigerian regulators must prioritize transparency, accountability, and effective collaboration with local indigenous investors across the country.

The African Union (AU) Vision 2063, “The Africa We Want,” will be difficult to attain if regulators in most African countries elect to be at the forefront of frustrating homegrown investments or efforts.

In a liberalized market such as Nigeria and other African countries, the role of regulators is, inter alia, to enable an efficient market where competition thrives and not to compete with private sector investors. Regulation is not a business because its motive is not to make a profit but to ensure firms operate fairly and grow so that their revenue contributions can proportionately increase.

The case of Dangote and Nigerian oil regulators may just qualify as a “tip of the iceberg” of the not uncommon struggles that majority small businesses and startup investors on the continent of Africa continue to endure.

In conclusion, going forward, the Nigerian regulators should enhance quality monitoring of oil on the domestic market and consider issuing absolute import quotas for refined oil to guarantee sustained domestic downstream market supplies, and enhance inclusive collaboration among industry stakeholders for the benefit of the economy and consumers in general. However, once it is confirmed that the domestic oil producers are sufficiently able to fully meet the national demand then the issuance of oil import quotas should be abolished immediately.

The author has over ten (10) years experience in investigating abuse of dominance, mergers and industry cartels in Zambia. For comments, contact the researcher at: kamayoyokm@gmail.com

References:

• Adepetun, A. (2020). Dangote’s woes with Nigerian oil regulators. The Guardian, 20 January 2020.
• Nigeria’s richest man Dangote escalates oil fight with regulator, seeks corruption probe
• Kovacic, W. E. (2017). Competition Law and Regulatory Policies. Journal of Competition Law and Economics, 13(2), 241-262.
• Federal Competition and Consumer Protection Commission (FCCPC). (2018). Federal Competition and Consumer Protection Act (FCCPA) 2018.
• Mankiw, N. G. (2014). Principles of Economics. Cengage Learning.
• Posner, R. A. (2014). Natural Monopoly and Regulation. Journal of Economic Perspectives, 28(2), 131

About The Author