Dangote refinery petrol deal with 20 marketers collapses over pricing disputes, triggering a surge in November 2025 petrol imports

The fuel supply arrangement between Dangote Petroleum Refinery and 20 major petroleum marketers, under which the parties agreed to offtake 600 million litres of petrol monthly, has collapsed due to disagreements over pricing, industry sources confirmed.

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The breakdown, which lasted barely a month, reportedly contributed to a surge in petrol imports in November 2025, with total imports reaching 1.563 billion litres, according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

The agreement, reached in October 2025, was intended as a pilot scheme to stabilise domestic fuel supply.

Each marketer was to lift roughly 30 million litres, while smaller independent marketers were restricted to purchases of 250,000 litres or less, forcing them to rely on the 20 approved distributors.

Chinedu Ukadike, National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said the deal was designed to reduce middlemen and ease pump price volatility.

However, sources indicated that the collapse stemmed from Dangote’s reluctance to adjust gantry prices in line with falling international benchmarks.

Initially, petrol was sold at N806 per litre for coastal delivery and N828 per litre at the refinery gantry.

Following a drop in international prices, marketers requested reductions, which Dangote implemented only partially.

This led many marketers to import petrol independently, undermining the exclusivity of the agreement.

Industry experts noted that the refinery later slashed the gantry price to N699 per litre, the lowest in 2025, but the adjustment came too late to prevent losses for depot owners and smaller marketers who had purchased at higher prices.

Jeremiah Olatide, CEO of petroleumprice.ng, explained that the pricing mechanism was tied to Eurobob, the international benchmark for European gasoline, with monthly reviews intended to align local prices with global fluctuations.

“With the collapse of the deal, Dangote now sells directly to any marketer, even those lifting as little as 250,000 litres. The market is now open, allowing competition and preventing artificial price hikes,” Ukadike said.

Latest data from the Major Energies Marketers Association of Nigeria (MEMAN) indicate that the spot price of imported petrol has dropped to about N696 per litre, slightly below Dangote’s current gantry price of N699 per litre.

MEMAN noted that the decline reflects lower international benchmark prices, reduced shipping costs, and a stronger naira, which has eased pressure on downstream fuel costs.

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The collapse of the pilot arrangement has prompted industry observers to call for more flexible pricing mechanisms and improved alignment between local refiners and international benchmarks to prevent future supply disruptions.