Former Nigerian Bar Association (NBA) President, Dr. Olisa Agbakoba SAN, has warned that the ongoing dispute between Dangote Petroleum Refinery and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) goes beyond a commercial or regulatory disagreement, raising fundamental questions about Nigeria’s economic sovereignty and constitutional management of its hydrocarbon resources.

In a press statement, titled “The Dangote Refinery–NMDPRA Dispute: Beyond Commercial Disagreement to Questions of Economic Sovereignty”, Agbakoba said the impasse highlights deeper contradictions in Nigeria’s petroleum governance framework.

According to the statement, the controversy surrounding Africa’s largest refinery, built at an estimated cost of $20 billion—reveals a striking paradox: Nigeria now has world-class refining capacity yet remains heavily dependent on imported petroleum products.

He noted that a private investor has delivered infrastructure long absent in the country but now faces regulatory obstacles from an authority whose mandate includes promoting efficiency, investment, and growth in the downstream sector.

“The issue at stake transcends commercial disagreement,” the statement said, describing the situation as one that strikes “at the heart of a fundamental development question: the sovereignty of Nigeria’s governance process over its hydrocarbon resources.”

Agbakoba criticised policy inconsistencies, particularly the reported difficulty domestic refineries face in securing crude oil feedstock while licenses for imported refined products continue to be issued.

He argued that such outcomes undermine local value addition, sustain foreign exchange pressures, and entrench Nigeria’s long-standing dependence on fuel imports.

He warned that the dispute reflects a broader structural problem in Nigeria’s oil sector, described as continued reliance on a “Contract Oil” model.

Under this system, crude oil is largely treated as an export commodity, while refining, job creation, and industrial development are outsourced to foreign economies.

As a result, Nigeria exports raw crude only to import refined products at premium prices, perpetuating economic dependency and denying the country the full benefits of its natural resources.

This approach, the statement argued, has contributed to decades of underdevelopment and vulnerability to global energy market shocks.

In contrast, Agbakoba highlighted Saudi Arabia’s petroleum governance model, described as “Development Oil.”

Saudi Arabia, he said, prioritises domestic refining, downstream integration, and control of the petroleum value chain, avoiding policies that undermine local capacity.

By comparison, Nigeria, despite being Africa’s largest oil producer, lacks similar downstream control, including ownership of a national tanker fleet.

Beyond economic arguments, the statement anchored its criticism in constitutional law.

Agbakoba cited Section 44(3) of the 1999 Constitution, which vests ownership and control of oil and gas resources in the Federal Government to be managed for the welfare and security of Nigerian citizens.

He argued that regulatory actions that frustrate investments capable of creating jobs, reducing import dependence, and strengthening local capacity may amount to a breach of this constitutional obligation.

Agbakoba described the situation in which a domestic refinery reportedly struggles to secure crude supply while fuel imports persist as a “fundamental failure” of constitutional responsibility.

The intervention adds legal and policy weight to an ongoing national debate over Nigeria’s energy strategy, particularly in the context of fuel subsidy removal, foreign exchange constraints, and rising energy costs.

Agbakoba stressed that the dispute should not be viewed as a conflict between a regulator and a single company.

Instead, he framed the impasse as a defining moment in Nigeria’s oil governance, one that will determine whether the country continues an extractive, import-dependent model or shifts toward a development-focused approach aligned with constitutional and national interests.

“This is not merely about one refinery or one company. It is about whether Nigeria will continue a failed approach that has produced decades of resource curse, or embrace principles that align hydrocarbon management with national development imperatives,

the statement said.

He urged regulators, policymakers, and industry stakeholders to resolve the dispute in a manner consistent with Nigeria’s constitutional obligations and long-term economic goals, warning that continued policy incoherence risks deepening structural weaknesses in the petroleum sector.

Analysts have repeatedly warned that failure to effectively utilise local refining capacity leaves the country exposed to external shocks and fiscal instability. (This Day)

Update news