Power, Rents and Refining: The Political Economy of Dangote Petroleum Refinery (DPR), Nigeria

Despite being one of world’s leading crude oil producers, Nigeria paradoxically depends on imports of refined petroleum products. In 2023, the country spent US$5 billion (₦7.5 trillion) on fuel imports, with costs already reaching US$2.8 billion (₦4.13 trillion) in the first half of 2025. This reliance persists despite the establishment, by Aliko Dangote, of Africa’s largest petroleum refinery, the 650,000-barrels-per-day Dangote Petroleum Refinery & Petrochemicals (DPR) in Lagos. Conceived as a transformative private-sector initiative to substitute import, conserve foreign exchange, and stimulate domestic value chains, the DPR has, however, struggled to secure adequate crude supply and market access. Paradoxically, while Nigeria continues to import fuel, the DPR exported over 1.1 billion litres of petrol between June and early September 2025. Hence, this paper sets out to untangle this puzzle through the application of the political settlement (PS) theory, focusing on evolving state-business relations in Nigeria’s downstream petroleum sector. Using desk research and semi-structured interviews, the paper argues that DPR/Dangote’s challenges to secure sufficient feedstock and protected markets domestically is attributable to the emergence of a financially autonomous and politically assertive ruling coalition under President Bola Ahmed Tinubu (PBAT) which disrupted historical patterns of mediating tensions between pro-market and pro-protection advocates. Whereas successive ruling coalitions had previously favoured protection for domestic capital through active state interventions, the PBAT ruling coalition pivoted towards market liberalisation against protection especially in the case of the DPR. Exploring why this is now the case, this study demonstrates the limits of entrepreneurial agency within Nigeria’s fragmented competitive clientelist settlement. Thus, even highly capable and politically connected entrepreneurs can encounter resistance when elite power configurations shift. The paper makes both empirical and theoretical contributions. Empirically, the paper shows how the PBAT ruling coalition has recalibrated state-business relations by marginalising domestic capital while effectively protecting foreign capital through liberal market access. Theoretically, it advances PS theory by integrating Bayart’s extraversion concept to illuminate how external actors shape domestic institutional and industrial outcomes.