The fuel supply arrangement between the Dangote Petroleum Refinery and 20 major petroleum marketers, under which the parties agreed to offtake about 600 million litres of petrol monthly, has collapsed following sharp disagreements over pricing, The PUNCH has learnt.
Findings indicate that the breakdown of the deal triggered a surge in petrol imports in November 2025, with total imported volumes rising to 1.563 billion litres, according to data released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The import figure was disclosed in the regulator’s November 2025 Fact Sheet titled State of the Midstream and Downstream Sector, which showed a significant spike in imported petrol volumes during the period the pricing dispute between the refinery and marketers escalated.
The arrangement, struck in October 2025 as a pilot scheme, was designed to stabilise domestic fuel supply and ease rising pump prices. Under the deal, 20 selected depot owners were to serve as primary distributors, collectively lifting about 600 million litres of petrol monthly from the Dangote Refinery, with each marketer taking roughly 30 million litres.
The National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, had earlier confirmed the agreement, explaining that it followed a strategic meeting between the refinery and key downstream operators.
According to Ukadike, the meeting—which included representatives of A.Y.M. Shafa, A.A. Rano, NNPCL Retail, Salbas and other major distributors—focused on streamlining product allocation, reducing layers of middlemen and curbing price distortions in the market.
“At the meeting, Dangote announced plans to sell to only 20 selected marketers who would act as primary distributors to others. Each of them was to lift a minimum of two million litres, translating to about 600 million litres monthly,” Ukadike said at the time, adding that the structure was expected to improve product availability and moderate retail prices.
However, industry sources told The PUNCH on Thursday that the deal, which lasted barely a month, collapsed after the refinery declined to adjust its gantry price in line with falling international petrol benchmarks.
One industry stakeholder, who spoke on condition of anonymity, said the agreement provided for monthly price reviews. At inception, petrol was sold to marketers at ₦806 per litre for coastal delivery and ₦828 per litre at the gantry.
As part of the arrangement, Dangote temporarily restricted direct sales to independent marketers, limiting them to purchases of 250,000 litres or less and compelling them to source products through the 20 approved marketers.
“The arrangement worked initially. Products were loaded smoothly through vessels and gantries, and more players were gradually added to the list,” the source said. “But problems started in November when importers realised that international benchmark prices had fallen below Dangote’s selling price.”
According to the source, importers expected prices to drop to around ₦750 per litre, but the refinery was reluctant to implement a significant downward review. “That was what triggered the heavy influx of imported petrol in November,” he added.
Although Dangote later slashed its gantry price to ₦699 per litre—the lowest in 2025—the move came too late to prevent losses. Depot owners and marketers who had purchased products at ₦828 per litre in October but were yet to sell reportedly suffered heavy losses, while smaller marketers struggled to adjust to the sudden price swing.
Data from the Major Energies Marketers Association of Nigeria (MEMAN) and petroleumprice.ng showed that during the period, the average landing cost of imported premium motor spirit fell to ₦829.77 per litre, lower than the ex-depot price of locally refined petrol.
MEMAN data indicated a steady decline in landing costs through October, dropping from ₦849.61 per litre on October 13 to ₦839.97 per litre by October 21. In contrast, Dangote’s gantry price reportedly stood at ₦877 per litre as of October 24, widening the price gap.
The dispute later spilled into the public domain, culminating in a confrontation between the Dangote Group and the former NMDPRA head, Farouk Ahmed, over the regulator’s issuance of multiple import licences to marketers—a controversy that preceded Ahmed’s resignation in December 2025.
Confirming the collapse of the agreement, the Chief Executive Officer of petroleumprice.ng, Jeremiah Olatide, said the pricing framework was tied to Eurobob, the international benchmark for European gasoline, with monthly reviews agreed in line with global crude oil movements.
He explained that while Dangote implemented a price reduction after the first month, it fell short of marketers’ expectations when compared with international prices, prompting a shift to imports.
“Yes, the arrangement has collapsed,” Olatide said. “Importation surged in November, with many vessels arriving at berth. When Dangote noticed the development, the refinery cut the price from ₦828 to ₦699 per litre, the sharpest reduction in 2025. But by then, the relationship with depot owners had already broken down.”
The National Publicity Secretary of IPMAN, Ukadike, also confirmed that the agreement was no longer in force. He said the refinery had reverted to open-market sales, allowing marketers to lift products in smaller volumes.
“Dangote has liberalised the buying options. Marketers are now free to buy products, even as low as 250,000 litres,” he said, describing the move as a market strategy aimed at avoiding distribution bottlenecks and artificial price hikes.
Ukadike added that tensions had also arisen because some marketers continued importing petrol despite signing the October agreement, undermining its exclusivity clause.
For now, the refinery has abandoned the restricted distribution model and opened sales to all interested marketers, a sharp departure from the October framework.
Efforts to obtain an official reaction from the Dangote Group were unsuccessful, as its spokesperson, Anthony Chiejina, did not respond to calls or messages.
Meanwhile, fresh market data show that the spot price of imported petrol into Nigeria has dropped to about ₦696 per litre, according to the latest energy bulletin released by MEMAN. The price, calculated at the Apapa jetty, is slightly below Dangote’s current gantry price of ₦699 per litre and lower than the 30-day average import parity price of ₦772.65 per litre.
MEMAN attributed the decline in spot prices to lower international benchmark prices, reduced shipping costs and relative stability in the foreign exchange market, with the naira trading at about ₦1,419 to the dollar. The association noted that similar downward pressure had been observed in diesel and kerosene prices.
According to MEMAN, fluctuations in import parity prices—calculated using Platts benchmarks, freight, insurance and terminal costs—continue to shape retail pump prices, the margins of depot owners and the competitiveness of local refining in Nigeria’s downstream petroleum sector.
