Dangote Refinery–Marketers Fuel Deal Collapses as Pricing Dispute Triggers Import Surge

The fuel supply agreement between the Dangote Petroleum Refinery and 20 major petroleum marketers has collapsed barely a month after it was reached, following sharp disagreements over pricing. The arrangement, struck in October 2025, was designed to stabilise Nigeria’s fuel supply by allowing selected marketers to collectively lift about 600 million litres of petrol monthly from the refinery. Industry sources say the deal broke down after Dangote declined to fully adjust prices in line with falling global benchmarks.

The fallout from the disagreement coincided with a sharp spike in petrol imports in November 2025, when Nigeria imported about 1.563 billion litres of fuel, according to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority. The surge occurred as international petrol prices dropped below Dangote’s selling price, making imports more attractive to marketers despite the refinery’s local production capacity.

Under the now-collapsed arrangement, Dangote sold petrol to approved marketers at N806 per litre for coastal delivery and N828 per litre at the gantry, while suspending direct sales to smaller independent marketers. The pricing structure was expected to be reviewed monthly based on international benchmarks. However, marketers argued that prices should have dropped to around N750 per litre in November as global prices declined — a reduction they say Dangote was slow to implement.

Industry analysts say the delay exposed marketers to losses, especially depot owners who had bought fuel at higher prices in October. Data from petroleumprice.ng and the Major Energies Marketers Association of Nigeria showed that the average landing cost of imported petrol fell below Dangote’s gantry price during the period, further weakening confidence in the agreement and accelerating imports.

Following the collapse, Dangote Refinery has reverted to open-market sales, allowing all marketers — including small independents — to lift fuel in quantities as low as 250,000 litres. The Independent Petroleum Marketers Association of Nigeria confirmed the agreement was no longer in force, noting that the refinery’s decision reflects competitive market dynamics. Dangote’s spokesperson did not respond to requests for comment as of press time.

source: Punch