The fuel supply agreement between the Dangote Petroleum Refinery and 20 major petroleum marketers has collapsed following disagreements over pricing, a development that has been linked to a sharp rise in petrol imports late last year, The PUNCH has learnt.
The arrangement, reached in October 2025, required the marketers to collectively lift about 600 million litres of petrol monthly from the refinery. However, industry sources say the deal broke down barely a month later after the parties failed to agree on price adjustments.
Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) indicate that petrol imports surged to 1.563 billion litres in November 2025, coinciding with the height of the dispute. The figures were contained in the regulator’s November 2025 Fact Sheet on the state of the midstream and downstream sector.
Under the pilot agreement, each of the 20 selected depot owners was expected to off-take roughly 30 million litres of petrol monthly. The deal was designed to stabilise domestic supply, reduce dependence on imports, and help moderate pump prices.
The National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, had earlier confirmed that the refinery set the target after consultations with key downstream operators, including major distributors such as A.Y.M. Shafa, A.A. Rano, NNPCL Retail, and Salbas. According to him, the strategy was to streamline product distribution by limiting sales to a small group of primary marketers who would supply others.
However, two industry sources said the agreement began to unravel in November when global petrol prices fell below Dangote Refinery’s selling price. Although the deal provided for monthly price reviews, the refinery was said to have delayed adjusting its gantry price in line with international benchmarks.
One source explained that marketers initially purchased petrol at N806 per litre for coastal delivery and N828 per litre at the gantry. As part of the arrangement, Dangote temporarily suspended direct sales to smaller independent marketers, forcing them to buy from the approved 20 marketers.
Problems emerged when importers found that the landing cost of imported petrol had dropped to around N750 per litre, significantly below Dangote’s price. This disparity reportedly triggered a wave of petrol imports in November.
Although Dangote Refinery later reduced its gantry price to N699 per litre—the lowest recorded in 2025—the cut came too late to salvage the agreement. Marketers who had stocked products at higher prices were left with losses, while smaller operators struggled to cope with the sudden market shift.
Industry data from the Major Energies Marketers Association of Nigeria (MEMAN) and petroleumprice.ng showed that the average landing cost of imported petrol fell steadily through October, reaching about N829.77 per litre by October 30—below Dangote’s ex-depot price at the time.
The pricing dispute also reportedly spilled into the public arena, fuelling tensions between the Dangote Group and the former head of the NMDPRA, Farouk Ahmed, over the issuance of multiple import licences to marketers. The standoff ultimately contributed to Ahmed’s resignation in December 2025.
The collapse of the deal has renewed concerns about pricing transparency, domestic refining competitiveness, and Nigeria’s continued reliance on imported petrol despite increased local refining capacity.
