KEY POINTS
- Dangote says new and rehabilitated refineries could increase competition.
- NNPC’s Port Harcourt, Warri and Kaduna plants are potential rivals.
- IPO targets N2.15 trillion, with NGX listing expected in November.
Dangote Refinery has warned that new and rehabilitated refineries in Nigeria, Africa and other major oil-producing regions could increase competition and put pressure on its market share, product prices and refining margins.
The disclosure was made in the refinery’s initial public offering prospectus as the company prepares to list its shares on the Nigerian Exchange (NGX).
Despite its dominant position in Nigeria’s refining sector, Dangote Refinery said its performance could be affected if additional refining capacity comes on stream in its domestic and export markets.
As of June 30, 2026, the 650,000-barrels-per-day refinery accounted for about 58% of Nigeria’s total installed refining capacity and an estimated 90% or more of the country’s operational refining capacity.
The company, however, cautioned that its large capacity does not eliminate the competitive risks posed by other refineries.
NNPC refineries could return to the market
Dangote Refinery specifically identified the Port Harcourt, Warri and Kaduna refineries operated by NNPC Ltd as potential competitors if they return to sustained commercial operations.
The three state-owned refineries have struggled for years with operational problems and have undergone several rehabilitation and turnaround maintenance programmes.
The Federal Government has continued efforts to restore the facilities, although sustained commercial production has remained a challenge.
Dangote Refinery said the return of existing facilities, combined with new refining projects, could increase the volume of petroleum products available in markets where it sells its products.
“If new or rehabilitated refineries become operational, the supply of refined petroleum products in the Issuer’s target markets could increase,” the company said in its prospectus.
An increase in supply could create stronger competition for customers and potentially affect the refinery’s ability to maintain its current market position.
The refinery warned that increased competition could have several financial consequences.
According to the prospectus, additional refining capacity could reduce Dangote Refinery’s market share, place downward pressure on product prices and compress refining margins.
Such developments could affect the company’s revenue, profitability, financial condition and future business prospects.
The warning is significant because Dangote Refinery has increasingly become a major supplier of refined petroleum products to Nigeria and other markets in Africa.
