The fuel supply arrangement between Dangote Petroleum Refinery and 20 major marketers has collapsed after just one month. Specifically, the breakdown stemmed from a sharp disagreement over pricing.
The deal began in October 2025. At that time, it required the selected marketers to offtake 600 million litres of petrol monthly. Its primary aim was to stabilize Nigeria’s domestic fuel market and reduce pump price volatility.
However, by November, global prices for refined products dropped significantly. Despite this, Dangote initially refused to lower its gantry price. As a result, marketers quickly turned to cheaper imported alternatives.
Consequently, petrol imports surged to 1.563 billion litres in November alone. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) confirmed this spike in its official report.
Under the original terms, the fuel supply arrangement set Dangote’s coastal delivery price at ₦806 per litre. The gantry price stood at ₦828. Moreover, the refinery suspended direct sales to small marketers who bought less than 250,000 litres.
Therefore, only the 20 approved distributors could purchase in bulk. All other retailers had to source from them. This structure was designed to cut out middlemen and bring down retail costs.
Yet, international benchmarks like Eurobob fell rapidly. In fact, importers could land petrol for around ₦750 per litre—well below Dangote’s fixed rate. Because of this, the refinery’s offer became uncompetitive almost overnight.
Although the agreement allowed monthly price reviews, Dangote delayed adjustments. Frustrated, marketers abandoned the deal and resumed imports.
Later, Dangote slashed its gantry price to ₦699—the lowest of 2025. Unfortunately, the move came too late. Many marketers had already purchased stock at ₦828 and suffered heavy losses.
Currently, data from MEMAN shows the spot import price is ₦696 per litre. This means it is now slightly cheaper than Dangote’s revised rate.
In response, Chinedu Ukadike of IPMAN confirmed the deal is over. “It is no longer in place,” he stated. Now, Dangote sells to all marketers—even those buying as little as 250,000 litres.
Additionally, some signatories had breached the agreement by importing fuel anyway. This further eroded trust in the exclusive model and contributed to its collapse.
Beyond pricing, the fallout triggered a public clash between Dangote and former NMDPRA head Farouk Ahmed. Their dispute over import licensing ultimately led to Ahmed’s resignation in December 2025.
Today, the fuel supply arrangement is defunct. As a result, Nigeria’s downstream market has returned to open competition. While this may benefit consumers through lower prices, it also highlights the ongoing difficulty of aligning large-scale refining with fragmented retail distribution.
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