The Dangote Refinery, while hailed as a solution to Nigeria’s energy problems, represents a dangerous attempt to monopolize the country’s oil sector. Monopolies are inherently harmful, stifling competition, driving up prices, and concentrating wealth and power in the hands of a few. If allowed to proceed unchecked, Dangote’s refinery will erode the benefits of free-market competition and deepen Nigeria’s economic challenges. The success of any market-driven economy is built on competition. Competition encourages innovation, drives down prices, and provides consumers with choices. A monopoly, on the other hand, erases these benefits. 

 

Dangote’s refinery, with its massive production capacity, threatens to squeeze out smaller players and stifle competition in the domestic refining sector. Nigeria has made efforts to privatize its oil sector, inviting private refineries to address the country’s chronic fuel shortages. But Dangote Refinery, with its enormous capacity and financial backing, will make it nearly impossible for smaller players to compete. In effect, Dangote’s refinery could become the only viable player in the market, forcing out competition before it even has a chance to take root. This kind of economic domination is antithetical to free-market principles and is particularly dangerous in a country where economic power is already concentrated in the hands of a few. Furthermore, monopolies have a well-documented history of leading to price hikes. Without competition to keep prices in check, Dangote will have little incentive to keep fuel prices low. This is particularly troubling in a country like Nigeria, where fuel prices are a major driver of inflation. Rising fuel costs would ripple through the economy, driving up the cost of goods and services and placing an even greater burden on already struggling Nigerian families.

 

Perhaps the most troubling aspect of this situation is the federal government’s complicity in the creation of this potential monopoly. Rather than promoting healthy competition, the government has granted Dangote a series of tax breaks, import duty exemptions, and other incentives that give him a distinct advantage over any potential competitors. While these incentives were initially justified as a means to promote domestic refining capacity, they have now morphed into tools for Dangote to consolidate his hold on the oil sector. The government should foster competition, not facilitate monopolies. By allowing Dangote to become the dominant player in the oil sector, the government is betraying its responsibility to its citizens. Instead of protecting consumers and ensuring that the benefits of Nigeria’s oil wealth are shared by all, the government is enabling the concentration of wealth and power in the hands of a single individual. It is also worth noting that Nigeria’s regulatory frameworks are woefully inadequate to deal with a monopoly of this scale. The NNPCL and other regulatory bodies have been largely ineffective in managing the country’s oil sector, and there is little reason to believe they will be able to effectively regulate a player as powerful as Dangote. Without robust oversight, the refinery’s dominance will only grow unchecked, deepening the stranglehold on Nigeria’s oil economy.

 

The creation of a monopoly in the oil sector is not just an economic issue—it is a human one. Nigeria’s reliance on imported fuel has already led to widespread hardship, with frequent fuel shortages and price hikes driving up the cost of living. The promise of domestic refining was supposed to alleviate these problems, but if Dangote is allowed to establish a monopoly, the Nigerian people will find themselves no better off. Monopolies tend to prioritize profits over people, and there is little reason to believe that Dangote’s refinery will be any different. Once he has established control over the sector, he will have little incentive to lower prices or improve service. Instead, the Nigerian people will be forced to pay whatever price Dangote deems fit, with no alternatives available. The human cost of such a monopoly would be devastating. Rising fuel prices would drive up the cost of transportation, food, and other basic necessities, deepening poverty and inequality in a country that is already struggling with these issues. The Nigerian government must recognize that allowing this monopoly to take root would be a betrayal of its people, and it must act to prevent this outcome.

 

It is not too late for Nigeria to prevent the creation of this dangerous monopoly. The Nigerian government must take immediate steps to level the playing field and promote competition in the oil sector. This means ending the preferential treatment that Dangote has received and providing equal opportunities for other private refineries to compete. Furthermore, the government must strengthen its regulatory frameworks to ensure that no single player is able to dominate the market. This will require a commitment to transparency, accountability, and robust oversight—qualities that have been sorely lacking in Nigeria’s oil sector. Finally, the Nigerian people must demand better from their government. The oil wealth of the nation belongs to its citizens, not to a single individual or corporation. By allowing a monopoly to form, the government is effectively handing over control of this vital resource to one man. This cannot be allowed to happen.

 

President Bola Tinubu must act now to prevent this monopoly from taking root. By promoting competition, strengthening regulation, and putting the interests of the Nigerian people first, the government can ensure that the country’s oil wealth is used for the benefit of all, not just a select few. The future of Nigeria’s oil sector, and indeed the future of its people, depends on it.