Nigeria's Dangote Petroleum Refinery, Africa's biggest oil refinery, is boosting production to satisfy domestic petrol and diesel demand, it said on Saturday, after the government introduced a new import levy on fuel to safeguard local production.
The continent's biggest oil producer has been trying to wean itself off imported fuel, and the 15% import levy is aimed at protecting recent multi-billion-dollar investments in domestic refining, the government said in a memo announcing the measure this week.
Anthony Chiejina, a spokesman of the Dangote Group, which invested $20 billion in the 650,000-barrel-per-day refinery, said the tariff plan would curb the dumping of substandard fuel.
The Dangote Refinery, which started production last year but has struggled to compete with cheap imports, is ramping up production, he said.
"Our refinery is loading out over 45 million litres of petrol and 25 million litres of diesel daily which is more than Nigeria needs," Chiejina said.
Since starting petrol production in September 2024, the refinery has lowered pump prices and ended fuel scarcity. But local fuel dealers say the price cuts are a tactic to drive them out of business.
They cautioned that the tariff policy, if not well executed, could cripple fuel importation and create a refining monopoly, exposing Nigeria to fuel scarcity in the long run.
"Petroleum products importers, who served as a price-check against profiteering, will be out of business if not well handled," said Billy Harry, president of the Petroleum Products Retail Outlets Owners Association of Nigeria. "If local refineries are not regulated, monopoly can destroy the market," he said.
