A fuel supply arrangement between the Dangote Petroleum Refinery and a group of 20 major petroleum marketers has collapsed, triggering a sharp rise in petrol imports and renewed volatility in Nigeria’s downstream oil sector.
The agreement, which aimed to stabilise domestic fuel supply through the monthly offtake of 600 million litres of petrol, reportedly broke down over pricing disputes, according to industry sources familiar with the matter.
Pricing Dispute Sparks Import Surge
Findings indicate that the breakdown of the deal coincided with a spike in petrol importation in November 2025, when total imports climbed to 1.563 billion litres, based on figures released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
The data, published in the authority’s November 2025 Fact Sheet on the State of the Midstream and Downstream Sector, showed a significant increase in import volumes during the period when disagreements over pricing intensified.
The original deal, reached in October 2025, was designed as a pilot framework under which 20 depot-owning marketers would each lift about 30 million litres of petrol monthly from the Dangote Refinery, serving as primary distributors across the country.
Industry Stakeholders Confirm Original Framework
The National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, had earlier confirmed that the refinery established the structure following consultations with key downstream operators.
According to Ukadike, the initiative was intended to streamline fuel distribution, improve nationwide availability, and ease mounting pressure on pump prices.
Participants at the meeting reportedly included representatives from A.Y.M. Shafa, A.A. Rano, NNPCL Retail, Salbas, and other major distributors. Discussions focused on reducing intermediary layers that often contribute to pricing inefficiencies.
Under the arrangement, Dangote was to sell exclusively to the selected marketers, each committing to lift a minimum volume to collectively reach the 600-million-litre monthly target.
How the Deal Unravelled
However, multiple industry sources confirmed that the agreement lasted barely a month before falling apart. The central issue was Dangote Refinery’s reluctance to sufficiently adjust its gantry price in response to declining international fuel benchmarks.
An industry stakeholder, who spoke on condition of anonymity, explained that the agreement included provisions for monthly price reviews. Initially, petrol was sold at ₦806 per litre for coastal delivery and ₦828 per litre at the gantry.
As part of the deal, Dangote temporarily halted direct sales to independent marketers purchasing volumes of 250,000 litres or less, compelling them to source products through the approved distributors.
The arrangement functioned smoothly in its early stages, with product deliveries through both shipping and gantry channels, and additional marketers gradually joining the approved list.
November Price Gap Triggers Import Pivot
The turning point came in November 2025, when international petrol prices fell below Dangote’s selling price. Importers, monitoring global benchmarks, argued that local prices should drop to around ₦750 per litre, a request the refinery was reportedly slow to accommodate.
As a result, marketers turned to imports, leading to a heavy influx of foreign petrol cargoes during the month.
Although Dangote later slashed its gantry price to ₦699 per litre, the lowest recorded in 2025, the adjustment came after many marketers had already incurred losses on higher-priced inventory.
Depot owners who purchased products at ₦828 per litre in October but had yet to sell were particularly affected, while smaller marketers struggled to realign pricing amid the sudden shift.
Import Costs Undercut Local Pricing
Data from the Major Energies Marketers Association of Nigeria (MEMAN) and petroleumprice.ng showed that the average landing cost of imported petrol fell to ₦829.77 per litre by late October, undercutting Dangote’s ex-depot price at the time.
MEMAN figures revealed a steady decline in landing costs throughout October, while Dangote’s gantry price remained at ₦877 per litre as of October 24, 2025.
The dispute later escalated into a public disagreement between Dangote Group and the former NMDPRA leadership over the issuance of multiple import licences, a controversy that ultimately preceded the resignation of the agency’s chief executive in December 2025.
Deal Officially Abandoned
Confirming the collapse, IPMAN’s Chinedu Ukadike stated that the agreement was no longer operational. According to him, the refinery has reopened sales to all marketers, including independent operators capable of lifting as little as 250,000 litres.
He noted that Dangote had invited marketers to resume direct loading as part of a broader strategy to liberalise distribution and encourage competition. Ukadike also revealed that some marketers breached the original agreement by continuing imports even after signing the deal, weakening its exclusivity provisions.
Market Prices Continue to Shift
Fresh market data indicate that the spot import price of petrol has dropped to approximately ₦696 per litre at the Apapa jetty, slightly below Dangote’s current gantry price of ₦699 per litre, according to MEMAN’s latest energy bulletin.
The association reported a 30-day average import parity price of ₦772.65 per litre, reflecting easing global crude prices, reduced shipping costs, and improved foreign exchange conditions.
Brent and WTI crude prices were recently quoted at $63.75 and $60.14 per barrel, respectively, while Bonny Light crude traded around $66.22 per barrel. MEMAN noted that diesel and kerosene prices have also come under downward pressure, with spot prices at ₦844.88 per litre for diesel and ₦882.94 per litre for kerosene.
According to the association, import parity prices—calculated using Platts benchmarks, freight, insurance, and terminal charges—remain critical indicators for pricing decisions, downstream profitability, and the sustainability of local refining operations.
