•By Adebanji Dada, Esq. BL, LLM, MBA, MCIArb, FSM
The opening of the Dangote Petroleum Refinery marks a historic turning point in Nigeria’s downstream petroleum sector. For the first time in decades, the country is producing fuel domestically at a scale that can rival — and potentially exceed — its internal consumption needs. Yet, this milestone has not come without tension.
The recent standoff between the Dangote Refinery and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) exposes the fault lines in a newly deregulated market. At the heart of the dispute are questions of pricing, logistics, and market structure — with allegations of monopolistic conduct on one side, and cartel-like demands on the other. Beyond these rivalries, the true stakes lie in protecting consumer welfare and ensuring that deregulation delivers its promise of efficiency, competition, and transparency.
Dominance and Abuse: The Legal Lens.
The Federal Competition and Consumer Protection Act (FCCPA) of 2018 defines a dominant position as the ability of an undertaking to act without regard to the reaction of its competitors, customers, or consumers. By virtue of its sheer refining capacity and integrated logistics network, Dangote arguably sits in such a position.
Dominance, however, is not unlawful. What the FCCPA prohibits is abuse. Section 72 explicitly lists discriminatory pricing, unfair trading terms, and refusal to supply on reasonable terms as abusive practices. Allegations that Dangote sells products at lower prices internationally while charging domestic marketers more, if proven, may amount to discriminatory pricing. Similarly, pricing structures that render it commercially unviable for local marketers to lift fuel without subsidies could be viewed as a constructive refusal to deal.
Global precedent reinforces these concerns. In Standard Oil Co. of New Jersey v. United States (1911), the U.S. Supreme Court dissolved the company after finding it monopolized the petroleum industry through predatory tactics such as discriminatory rebates. The lesson is clear: dominance must not be used to exclude competitors or distort the market. In the EU, the Gazprom case (2018) illustrates another point: a dominant supplier that imposes territorial restrictions or unfair pricing terms abuses its position, even where its infrastructure is critical to market supply. The European Commission required Gazprom to remove such restrictions and tie prices to competitive benchmarks — not break up the company, but discipline its conduct.
DAPPMAN’s Position: Fair Grievance or Cartel Tactics?
On the other side, DAPPMAN’s demand for an annual subsidy of ₦1.505 trillion (roughly a ₦75/litre discount) to cover logistics appears less like a plea for fairness and more like collective bargaining that risks crossing into cartel territory. The FCCPA prohibits agreements between undertakings that restrict or distort competition. If depot owners collectively insist on uniform discounts or refuse to lift products unless their conditions are met, they risk violating this prohibition.
This recalls the U.S. Supreme Court’s Standard Stations case (1949), where exclusive dealing arrangements substantially foreclosed competition in petroleum supply. The principle is the same: coordinated conduct by multiple market actors that limits competitive choice is unlawful, regardless of whether the actors are buyers or sellers.
In fairness, many depot owners are grappling with obsolete assets. Femi Otedola — a founding member of DAPPMAN — has himself acknowledged that Nigeria’s 4 million metric tons of depot capacity is underutilized, with some 70% idle since local refining replaced imports. His advice that depot owners pivot to retail operations reflects a hard truth: deregulation has changed the business model, and clinging to the past risks financial ruin.
Consumers: The Forgotten Stakeholders.
Caught in the crossfire of corporate disputes are the Nigerian people. Since the removal of fuel subsidies, consumers face the full force of market pricing. If the Dangote–DAPPMAN standoff leads to supply disruptions or inflated costs, it is ordinary Nigerians who will bear the brunt.
Three consumer interests stand out:
1. Price fairness — Alleged price differentials between domestic and international buyers must be transparently explained. If unjustified, regulators must act.
2. Transparency — Both Dangote and marketers must disclose the cost components of pricing. Without clarity on refinery costs, logistics margins, and distribution charges, suspicion will fester and trust will erode.
3. Supply security — A prolonged impasse could trigger shortages, queues, and economic paralysis. Fuel availability is not just an economic good; it is a social necessity.
The Essential Facilities Doctrine.
A central issue is access to infrastructure. Dangote controls not only refining but also critical jetties, gantries, and transport networks. Where competitors cannot practically duplicate such facilities, competition law often treats them as “essential facilities.” The doctrine, well established in global jurisprudence, requires that dominant firms grant access on fair, reasonable, and non-discriminatory (FRAND) terms.
In the Gazprom case, the EU Commission emphasized exactly this point: when critical infrastructure is controlled by a dominant player, access must be granted on equitable terms to avoid foreclosure of competitors. Nigeria’s regulators can borrow directly from this approach.
Policy and Legal Recommendations.
To chart a sustainable path forward, regulators and stakeholders must act with both firmness and foresight.
1. Regulatory Audit of Pricing and Access
FCCPC and NMDPRA should jointly investigate Dangote’s pricing policies, logistics charges, and access conditions for marketers. Discriminatory or exclusionary practices must be addressed with binding commitments.
2. Transparent Pricing Template.
A national pricing framework should clearly break down ex-refinery costs, logistics margins (for both inland and coastal delivery), and ancillary charges. This template would remove opacity and curb unilateral manipulation.
3. Fair Access to Infrastructure
If Dangote’s jetties and gantries are essential facilities, access must be mandated on FRAND terms. Regulators should set tariffs and conditions that balance the refinery’s investment recovery with fair competition.
4. Discipline Collective Action by Marketers. DAPPMAN must be cautioned against collusive conduct. Legitimate grievances should be pursued individually or through lawful advocacy, not through collective price-fixing or refusal to trade.
5. Promote Logistics Efficiency.
Instead of subsidies, government should incentivize private investment in competitive logistics — improved port efficiency, dredged coastal routes, secure waterways, and modern transport fleets.
6. Consumer-Centric Oversight.
Ultimately, the consumer’s right to fair prices and reliable supply must be paramount. Regulators must embed consumer representatives in oversight processes, ensuring that public interest remains the guiding star.
Conclusion.
The Dangote–DAPPMAN clash is not merely a battle of corporate egos; it is a test of Nigeria’s regulatory maturity. History warns us: from Standard Oil in the U.S. to Gazprom in the EU, unchecked dominance and collusive resistance both undermine markets. The law does not forbid success, but it forbids its abuse.
Nigeria now stands at a crossroads. The refinery has the potential to secure energy independence, create jobs, and reduce foreign exchange pressure. But that promise will be squandered if dominance turns into monopoly, or if resistance calcifies into cartel behavior.
Regulators must hold both sides accountable: Dangote, to ensure its power is exercised fairly, and DAPPMAN, to ensure its conduct does not stifle competition. Above all, consumers must not be forgotten. For it is their daily lives — the price of transport, the cost of goods, the reliability of energy — that measure whether deregulation has succeeded.
If Nigeria applies global antitrust lessons with courage and transparency, this dispute can become a turning point. Rather than descend into a destructive standoff, it can lay the foundation for a downstream petroleum sector that is efficient, competitive, and — most importantly — fair to the Nigerian people.
The author is an attorney – a Partner at Greenbridge Partners (Legal Practitioners), and a public affairs analyst based in Abuja, Nigeria. He writes on law, governance, and economic policies. Correspondence may be directed to adada@greenbridge-law.com.
