E-Financial
Refining Without Relief: How Global Oil Wars, Market Structure, and Monopoly Risks Still Drive Fuel Prices in Nigeria
By Blaise Udunze
The vision was bold. The expectation was clear. And the promise was powerful. When the Dangote Refinery began operations, it was hailed as Nigeria’s long-awaited escape from decades of energy contradiction, which involves exporting crude oil while importing refined fuel at high costs. It was meant to guarantee supply, stabilize prices, conserve foreign exchange, and most importantly, deliver relief to ordinary Nigerians.
What appears to be a distinct contradiction is that, despite months into its operation, a different reality is emerging, with fuel prices rising sharply. Inflationary pressures are intensifying. This occurrence has forced Nigerians to ask a difficult question once again, one that calls for an urgent answer. Why does a country that produces and refines crude oil still suffer the consequences of global oil shocks?
Looking at the trend, it is clear that the answer lies not just in geopolitics, but in the deeper structure of Nigeria’s oil economy, where global pricing, policy gaps, and now the looming risk of monopoly intersect.
With the recent development, the latest alarming surge in petrol prices has been driven largely by escalating tensions in the Middle East. This is particularly the U.S-Israel strikes on Iran and retaliatory measures from Tehran. A well-known fact is that at the center of the crisis is the Strait of Hormuz, a vital oil transit route through which a significant portion of global supply flows. Any disruption, even a speculative one, triggers immediate spikes in crude prices.
Within a week, oil prices jumped from the mid-$60 range to nearly $120 per barrel. For global markets, this is expected. For Nigeria, it is devastatingly ironic. Because, despite having crude oil in abundance and despite refining it locally, Nigeria remains fully exposed and this has continued to re-echo the same ironic question.
In a rare moment of corporate candor, the refinery’s leadership acknowledged this reality. The plant is deeply affected by global shocks. Crude oil, even when sourced locally, is priced at international benchmarks. Shipping costs have surged dramatically, from about $800,000 per tanker to as high as $3.5 million. Insurance premiums have climbed, and logistics have become significantly more expensive, with total costs further driving higher.
Even more revealing is the refinery’s sourcing structure. Only about 30 percent – 35 percent of crude comes from the Nigerian government supply under the crude-for-naira framework. A significant portion is still purchased in U.S. dollars on the open market, while another 30 percent – 40 percent is sourced internationally, including from the United States and other regions. This means the refinery is not insulated; it is integrated into the global oil system. The implication is unavoidable as local refining has not translated into local pricing control.
The impact on Nigerians has been immediate and severe, as petrol prices have surged from under N800 earlier in the year to over N1,200, and in some regions, it is even more alarming when the prices skyrocketed close to N1,400 per litre. Within weeks, multiple price increases have been recorded, driven largely by global crude price spikes and rising logistics costs. Doubtless, the country has witnessed the consequences ripple across the economy as transport fares rise, food prices increase, businesses struggle with higher operating costs, and inflation accelerates.
The development has attracted the attention of the labour unions and the organised private sector, prompting them to raise concerns and alarm about the consequences of job losses, business closures, and worsening hardship if the trend continues with each passing day, witnessing a daily increase and causing possible artificial scarcity.
Nigeria remains trapped in a painful contradiction. It produces crude oil. It refines crude oil. Yet it cannot protect its citizens from global oil volatility. As Aliko Dangote himself acknowledged, Nigeria has no direct role in the conflict driving these price increases, yet it bears the consequences due to global economic interdependence.
In a real sense, this is the deeper tragedy, as Nigeria has achieved capacity without control.
At the heart of the issue is a structural reality, crude oil is priced globally, not locally. Even under the crude-for-naira arrangement, pricing is benchmarked against international rates. This means refineries pay global crude prices, fuel prices reflect global market conditions, and domestic consumers absorb international shocks. In essence, Nigeria has moved refining home without bringing pricing sovereignty with it.
To be fair, the Dangote Refinery has played a stabilizing role. Nigeria still enjoys relatively lower petrol prices compared to many global markets. In several countries, supply disruptions have led to panic buying and rationing, while Nigeria has maintained a consistent supply. As the refinery’s CEO aptly noted, what is worse than $120 oil is no oil. The refinery has prevented scarcity, but it has not prevented high prices. Availability, in this case, has not equated to affordability, which is the painful part for the citizens.
While much of the current debate focuses on pricing, another critical issue is quietly taking shape, which is the risk of market concentration. Dangote Refinery deserves credit for its scale and ambition, but scale brings power, and power demands oversight. If fuel importers are gradually pushed out and no competing refineries emerge at scale, Nigeria could find itself transitioning from a public sector monopoly to a private sector dominance led by a single player.
Nigeria has seen this pattern before. In the cement industry, increased domestic production did not necessarily translate into lower prices. Limited competition allowed prices to remain elevated despite local capacity. The same risk now looms in the downstream oil sector. Without competition, price-setting power becomes concentrated, supply risks increase, and consumer protection weakens. In a country with fragile regulatory institutions, this is not a theoretical concern; it is a real and present danger.
No one should perceive this wrongly, because it is important, however, not to misplace blame. It should be made known that the Dangote Refinery is not a charity; it is a private enterprise operating within market realities. It must recover its investment, manage costs, and deliver returns. Its exposure to global pricing is not a failure of intent but a function of the system within which it operates.
The real issue lies in the structure of the market and the absence of sufficient competition.
It is no longer news that Nigeria’s downstream sector is now largely deregulated following the removal of fuel subsidies. While deregulation has reduced government fiscal burden and encouraged private investment, it has also exposed consumers to price volatility and limited the scope for intervention, as this has continued to cause pain. Markets, in theory, deliver efficiency, but in practice, they require competition and effective regulation to function properly. Without these, deregulation can simply replace one form of inefficiency with another.
Nigeria does not need to weaken Dangote Refinery; it needs to multiply it. The goal should be to build a competitive refining ecosystem to replace one dominant structure with another. The truth is not far from this, as part of a lasting solution, it requires encouraging new refinery investments, removing bottlenecks for players such as BUA and modular refineries, ensuring transparent crude allocation, providing open access to pipelines and storage infrastructure, and enforcing strong antitrust regulations.
Competition remains the most effective regulator of price, which is sacrosanct and it protects consumers, strengthens supply security, and reduces systemic risk.
This must also be perceived beyond competition, which calls for the government to act strategically. The fact is that when supplying crude to local refineries at discounted or stabilized rates, expanding naira-based transactions, and introducing temporary relief measures during global crises are all viable options that must be put into consideration. Energy is too critical to be left entirely to market forces, especially in a developing economy where millions are highly vulnerable to economic shocks.
It is time that Nigerians understood that the nation’s refining crisis has been decades in the making, and it cannot be solved by a single refinery, no matter how large. If asked, it will be said that this is a fact that can’t be argued. The Dangote Refinery is undoubtedly a turning point, but it will only remain so if it is embedded within broader systemic reform. Otherwise, Nigeria risks replacing one form of dependency with another, from import dependence to domestic concentration.
The question is no longer whether Nigeria can refine crude oil. It can. The real question is whether Nigeria can build a system that ensures fair pricing, competitive markets, consumer protection, and economic resilience, as these are exactly the core answers.
If global conflicts continue to dictate local fuel prices, if monopoly risks go unchecked, and if citizens remain vulnerable despite abundant resources, then the promise of local refining will remain unfulfilled, as it will bring no expected relief.
What is playing out is the well-known fact that in refining, as in democracy, concentration of power is dangerous. And in both, the strongest safeguard remains the same, competition, transparency, and institutions that serve the public interest.
Blaise, a journalist and PR professional, writes from Lagos and can be reached via: [email protected]
Federal Ministry of Finance has halted enforcement of about N680 million in disputed fees imposed by the National Insurance Commission (NAICOM) on NICON Insurance Limited and Nigeria Reinsurance Corporation (Nig Re) as part of the ongoing insurance industry recapitalisation exercise.
The Ministry also directed NAICOM to suspend its demand that the two companies transfer their entire recapitalisation funds into an escrow account with the Central Bank of Nigeria (CBN), pending determination of a petition challenging the legality of the charges and the directive.
The intervention followed a July 27, 2026 petition by NICON and Nig Re over what they described as unlawful fees and regulatory demands arising from the implementation of the Nigerian Insurance Industry Reform Act (NIIRA) 2025.
In a letter to the Commissioner for Insurance, Raymond Omachi, permanent secretary, Federal Ministry of Finance, on behalf of Taiwo Oyedele, minister of Finance and coordinating minister of the Economy, requested that NAICOM provide a detailed response and legal justification for the disputed requirements.
The Ministry specifically directed the Commission to suspend enforcement of the contested processing and verification fees, the one per cent Capital Injection Fee, and the directive requiring the companies to transfer their full recapitalisation funds to a CBN escrow account.
The dispute centres on NAICOM’s assessment of a one per cent fee on capital injected by operators, alongside additional processing and verification charges prescribed under Appendix 2 of the Commission’s Minimum Capital Requirement Guidelines.
According to the petition, the combined assessments amounted to N305 million for NICON and N375 million for Nig Re, bringing the disputed charges to N680 million.
The companies are also challenging what they described as an unconstitutional requirement to transfer more than the statutory proportion of their recapitalisation funds to the CBN.
They contend that Section 16(3) of NIIRA 2025 provides for a 10 per cent statutory deposit, and not the transfer of the entire capital injection into an escrow account.
The companies told the Ministry that they had already met the July 31, 2026 recapitalisation deadline.
NICON said it injected N420 billion, while Nig Re injected N30 billion into Mudaraba Term Deposit accounts with Lotus Bank Limited. The companies maintained that the amounts exceeded their adjusted recapitalisation requirements of N16 billion and N28 billion, respectively.
They further stated that they had deposited N42.5 billion and N43.5 billion respectively with the CBN, in compliance with the statutory deposit requirement under Section 16(3) of the new law.
The companies also disclosed that they had made initial payments of N480 million and N75 million, respectively, in fees.
The Finance Ministry’s directive effectively places the disputed charges and escrow requirement on hold while NAICOM is expected to justify the legal and regulatory basis for its actions.
The intervention could have wider implications for the insurance industry’s recapitalisation programme, particularly as operators face regulatory deadlines to strengthen their capital base under the new insurance law.
The controversy also raises questions about the extent to which regulatory guidelines can impose additional financial obligations on operators beyond those expressly provided for under the enabling legislation.
NAICOM is now expected to respond to the Ministry’s request and explain the statutory basis for the one per cent capital injection fee, the additional processing and verification charges, and the requirement for the full capital injection to be transferred into a CBN escrow account.
The Securities and Exchange Commission (SEC) has launched a nationwide awareness campaign aimed at helping investors and beneficiaries recover unclaimed dividends and inherited investments, as part of efforts to strengthen investor protection and reduce the volume of dormant assets in Nigeria’s capital market.
The initiative, unveiled in Abuja through the Probate/Unclaimed Monies Awareness and Investor Clinic, seeks to educate investors, beneficiaries and estate executors on probate procedures, estate administration and the processes involved in accessing financial assets left behind by deceased relatives.
Speaking at the event, Dr Emomotimi Agama, the Director-General of the SEC, said the Commission was addressing a long-standing challenge that had prevented many families from accessing investments belonging to deceased relatives.
Agama said many beneficiaries face difficulties obtaining probate, letters of administration, death certificates and other documents required to claim shares, dividends and other financial assets.
“For many Nigerian families, the death of a loved one who held shares, dividends or other investments marks the beginning of a long and often confusing journey,” he said.
According to him, the complexity surrounding estate administration often leaves beneficiaries unable to access legitimate investments and other financial assets inherited from deceased relatives.
He described unclaimed dividends and dormant assets as a major concern for the Nigerian capital market, noting that the funds represent money that should be benefiting families but remains idle because beneficiaries are unable to access them.
“Across our market, unclaimed dividends and dormant assets represent real money—money that belongs to real families, sitting idle, disconnected from the people it was meant to serve,” Agama said.
The SEC DG said the Commission was committed to bridging the gap through policy reforms, investor education and sustained engagement with investors, beneficiaries and other stakeholders in the capital market.
He stressed the importance of ensuring that investors and their families were adequately informed about the procedures for documenting, preserving and transferring financial assets to beneficiaries.
Agama said the awareness campaign would also provide an avenue for members of the public to better understand probate processes and the requirements for recovering unclaimed monies and inherited investments.
Also speaking, the Acting Chief Executive Officer of Meristem Registrars and Probate Services Limited, Ms Nkechinyelu Okoye, identified poor awareness and inadequate estate planning as major factors contributing to the accumulation of unclaimed financial assets.
Okoye said some beneficiaries were unaware that financial assets such as shares and dividends formed part of a deceased person’s estate, while others did not know that their deceased relatives had investments in the capital market.
She added that some beneficiaries were also unfamiliar with the documentation and legal procedures required to establish their entitlement and successfully claim the assets.
According to her, these challenges often result in financial assets remaining unclaimed for extended periods, even when legitimate beneficiaries are available.
The initiative is expected to improve public awareness of probate and estate administration procedures while helping more families identify and recover investments and other financial assets belonging to them.
It is also part of broader efforts to reduce the volume of unclaimed dividends and dormant assets in the capital market and ensure that funds belonging to investors and their beneficiaries are returned to their rightful owners.
United Bank for Africa (UBA) Plc, africa’s global bank, has partnered Mikano Motors to launch an auto financing scheme, themed: ‘Drive Your Dream Today’, specifically designed to ease the purchase of new vehicles by making them more accessible to Nigerians.
General Manager, Mikano Motors, Tarek Mostafa; Executive Director, Personal and Business Banking, United Bank for Africa, Chidi Okpala and National Operations Manager, Syam Abdulkadir, during a partnership signing between both parties, themed: ‘Drive Your Dreams Today’, a Flexible vehicle financing solutions, initiative at the Mikano Showroom in Victoria Island
The flexible Financing solutions Initiative, requires customers to make an initial payment of just 30 percent while the Bank finances the remaining 70 percent.
Unveiled at the Mikano Motors showroom in Victoria Island, Lagos, the scheme allows eligible customers to repay the financed amount in instalments over a period of 36 months at an interest rate of 23 percent.
The financing is available to a broad range of customers, including individuals who are not on a salaried income, providing entrepreneurs, and other eligible Nigerians with a structured pathway to vehicle ownership.
The process begins with a simple eligibility check. Interested customers can visit their nearest UBA branch or email [email protected] to confirm their eligibility. Once approved, customers can proceed to Mikano Motors to obtain a proforma invoice for their preferred vehicle and continue with the financing process.
Speaking at the launch, UBA’s Group Executive Director, designate, Personal and Business Banking, Chidi Okpala, said the partnership reflects the Bank’s commitment to making everyday aspirations more attainable while promoting a stronger credit culture and advancing financial inclusion.
“Owning a car should not be out of reach for hardworking Nigerians, and this partnership makes it far more achievable,” Okpala said. “A customer puts down 30 percent, we finance the rest, and they pay us back comfortably over a three years period. By removing the single biggest barrier to vehicle ownership where a customer just commits with an upfront cost, we are showing what customer-first banking looks like in practice, which is making their lives easier, by meeting our customers where they are and helping them get where they want to be.”
Also speaking, UBA’s Group Head, Consumer Lending, Frank Okoh, said the scheme was designed to make vehicle financing straightforward and accessible to both salaried and self-employed customers.
“We have kept the entry simple and the terms clear, whether you earn a salary or run your own business,” Okoh said. “A short eligibility check at any branch or by email is all it takes to begin, and our team guides the customer through every step to the moment they collect their keys.”
For Mikano Motors, the partnership provides an opportunity to extend its vehicle ownership proposition to a wider pool of Nigerians
The company’s General Manager, Tarek Mostafa, said the collaboration aligns with Mikano Motors’ vision of providing customers with a high-end ownership experience supported by reliable after-sales services.
“Mikano Motors was established to give Nigerians a high-end ownership experience, from the showroom to years down the road,” Mostafa said. “The backbone of any automotive business is not just the sale, but the after-sales service that follows. Every vehicle we sell is backed by genuine spare parts, reliable maintenance and quality service available anywhere in the country. Wherever you are we would come meet you at no extra cost”
“Partnering with UBA lets more customers enjoy that experience, and we are proud to build lasting relationships alongside a bank that shares our commitment to service,” he added.
Established in 2018 under Mikano International, Mikano Motors builds on more than 35 years of the group’s presence in Nigeria. The company offers a diversified portfolio of vehicles supported by nationwide sales and after-sales services.
The partnership further strengthens UBA’s consumer lending proposition, providing customers with structured financing solutions designed around accessibility, affordability and convenience. Through partnerships such as this, the Bank continues to expand access to credit while helping customers meet significant personal and lifestyle needs with ease.
United Bank for Africa is one of the largest employers in the financial sector on the African continent, with 25,000 employees group-wide and serving over 45 million customers globally. Operating in twenty African countries, the United Kingdom, the United States of America, France and the United Arab Emirates, UBA provides retail, commercial and institutional banking services, leading financial inclusion and implementing cutting-edge technology.
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