EcofinAgency Report
Nigeria’s growing refining capacity has reduced its reliance on imported fuel, but imports continue to play a role in keeping the domestic market supplied. A new court ruling reinforces that role at a time when the country is redefining the balance between local production and foreign supply.
On September 28, the Federal High Court in Abuja ordered the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to continue issuing import licenses to three distributors: Matrix Energy, AA Rano and AYM Shafa.
The three companies went to court in June to challenge the regulator’s handling of their applications. They say they have invested more than $20 billion in infrastructure, logistics and distribution networks in Nigeria. The court ruled that the NMDPRA’s refusal to issue the licenses and related permits violated provisions of the Petroleum Industry Act (PIA).
The decision comes after the regulator gradually restricted new import licenses as locally refined supply increased. The question now is how much room imports should retain in a market where domestic production covers a growing share of demand.
Dangote cuts imports without meeting all demand
In February 2026, the NMDPRA issued no new gasoline import licenses, a situation that continued into early March. The regulator concluded that improved domestic supply allowed it to suspend new permits under the PIA, which provides for imports when local production is insufficient to meet demand.
That assessment did not mean Dangote’s refinery alone could meet the country’s needs. Average gasoline consumption stood at 56.9 million liters per day in February, down from 60.2 million liters in January. During the same period, the Dangote refinery supplied 36.5 million liters of gasoline per day to the domestic market, equivalent to about 64% of average consumption, along with roughly 8 million liters of diesel.
The market therefore continued to depend on several sources of supply. About 3 million liters of imported gasoline still entered the market each day in February, according to the NMDPRA, despite the halt in new licenses. The suspension applied to new authorizations rather than immediately removing imported products from the supply chain.
Conditions changed again in late March. The NMDPRA resumed issuing licenses after supply shortages emerged amid market disruptions caused by the Middle East crisis. Six distributors then received authorization to import additional gasoline.
The sequence shows that increased local refining has reduced Nigeria’s need for imports without eliminating their role as a supply adjustment mechanism. When available volumes are considered sufficient, the regulator can restrict new authorizations. When a shortfall emerges, imports can supplement domestic supply.
Licenses at the center of the new balance
That shift partly explains the dispute between the Dangote refinery and fuel distributors. In May, the group went to court to seek the cancellation of licenses granted or renewed by the NMDPRA to NNPC and several distributors.
Dangote argued that imports should be permitted only when domestic production is insufficient and said the authorizations threatened its commercial operations. Distributors, by contrast, argue that overly strict import restrictions could reduce competition and expose the market to supply risks.
The September 28 ruling therefore comes in a market where increased domestic refining has already changed the role of imported fuel without making it unnecessary. The dispute now centers as much on access to import licenses as on how foreign supplies can coexist with Nigeria’s larger domestic refining industry.