By Ali Elias
Senior Advocate of Nigeria and constitutional lawyer, Mr. Olisa Agbakoba, has warned that the ongoing dispute between the Dangote Petroleum Refinery and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) goes far beyond a commercial disagreement, describing it as a fundamental test of Nigeria’s economic sovereignty and governance of its hydrocarbon resources.
In a public statement on the impasse, Agbakoba argued that the issues at stake strike at the heart of Nigeria’s development strategy and its constitutional responsibility to manage oil and gas resources in the national interest. According to him, regulatory actions that appear to undermine domestic refining capacity raise troubling questions about whether Nigeria is committed to self-sufficiency or resigned to continued dependency on imported petroleum products.
He described as paradoxical the fact that Nigeria now hosts a $20 billion refinery—one of the largest in the world—yet continues to rely heavily on imported fuel. Agbakoba noted that while a private investor has built the refining capacity the country has long lacked, that investment is facing obstacles from the very regulatory framework meant to enable and protect such strategic infrastructure.
“When government policy actively frustrates transformative local investment, we must question whether our economic strategy serves national interest or perpetuates dependency,” he said.
Agbakoba stressed that the dispute touches critical national concerns including local refining, employment generation, poverty reduction and industrial development, rather than the commercial fortunes of a single company. He argued that the controversy reflects a deeper structural problem in Nigeria’s petroleum governance model.
According to him, Nigeria still operates what he termed a “Contract Oil” system, in which crude oil is treated largely as an export commodity, with value addition, job creation and industrial growth outsourced to foreign economies. Under this model, the country exports crude oil only to import refined products at significantly higher costs, a cycle he said has entrenched economic dependency over decades.
By contrast, Agbakoba cited Saudi Arabia as an example of what he described as a “Development Oil” approach, where petroleum resources are deliberately deployed to drive national transformation. He noted that Saudi Arabia protects and prioritises local capacity across the value chain, resulting in a strong downstream sector, world-class refineries and a maritime fleet of more than 500 vessels—achievements Nigeria lacks despite being Africa’s largest oil producer.
He further anchored his argument on constitutional grounds, referencing Section 44(3) of the 1999 Constitution, which vests ownership and control of oil and gas resources in the Federal Government for the welfare and security of Nigerians. Agbakoba contended that regulatory actions which frustrate investments capable of creating local capacity, generating jobs and reducing import dependence amount to a failure of this constitutional obligation.
“The current situation where a domestic refinery struggles to secure crude feedstock while import licences continue to flow represents a fundamental failure of constitutional responsibility,” he said.
Agbakoba maintained that the dispute is emblematic of a broader choice confronting Nigeria: whether to persist with a model that has yielded decades of resource underperformance or to adopt a development-driven approach that aligns hydrocarbon management with national and constitutional priorities.
He described the moment as a defining crossroads between sovereignty and dependency, development and extractive stagnation, and constitutional compliance and commercial expediency.
Calling on policymakers, regulators and industry stakeholders to reflect on the wider implications of the dispute, Agbakoba urged a resolution that supports Nigeria’s long-term national interest, strengthens domestic capacity and affirms the country’s economic sovereignty.