Energy: Expert Calls For Domestic Refining Framework

An energy expert, Mr Abdulrazaq Hamzat, has called on the federal government, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Nigerian National Petroleum Company Limited (NNPCL) to develop a domestic refining development framework to ensure competition and fair market balance in the oil sector.

Hamzat, who specialises in energy policy and economics, said Nigeria has conquered one aspect of its petrol challenges with the success of Dangote Refinery, but noted that reliance on a single privately-owned mega refinery poses long-term risks to pricing, supply security and energy sovereignty.

He, therefore, called on the government to develop a framework for local refining competition.

While commending Dangote’s $20 billion refinery as a landmark private investment, Hamzat emphasised that true national benefit lies not in monopoly, but in a competitive domestic refining ecosystem.

Hamzat, who spoke with LEADERSHIP in Ilorin, Kwara State, condemned importation as an alternative to preventing monopoly.

“It is unwise to encourage fuel importation just to create competition for Dangote. Rather, government should deliberately nurture domestic competitors by providing a policy and financial framework for the emergence of multiple refineries across the country,” he said.

Hamzat explained that the proposed domestic refining development would be a clear policy blueprint that outlines incentives, financing mechanisms, regulatory clarity, and partnerships to encourage the establishment and sustainability of new private and modular refineries.

Citing international parallels, Hamzat cited the example of countries like India, which operates more than 20 refineries including those owned by Reliance Industries, Indian Oil Corporation, and Bharat Petroleum, ensuring healthy competition and stable supply, adding that the United States boasts of over 125 operating refineries, preventing monopoly dominance.

“Nigeria must learn from global best practices. The Dangote Refinery is a great achievement, but Nigeria’s oil sector cannot be considered reformed until multiple domestic players exist to balance the market. Without a framework for competition, the country risks swapping dependence on foreign importers for dependence on a single local refiner,” Hamzat warned.

He suggested that Nigeria’s sovereign wealth fund and energy-focused development banks could create a refining development fund to provide low-interest financing for modular and mid-sized refineries.

Hamzat concluded that the sustainability of Nigeria’s fuel security lies not in policy silence or monopoly tolerance but in structured, competitive domestic refining capacity that can guarantee fair pricing, availability, and resilience against shocks.