The fuel supply agreement between Dangote Petroleum Refinery and 20 major petroleum marketers has collapsed following unresolved disagreements over petrol pricing.
The deal, reached in October 2025, required marketers to offtake about 600 million litres of petrol monthly and was expected to stabilise domestic fuel supply. However, the arrangement lasted only one month before breaking down.
Multiple industry sources revealed that the collapse was triggered by Dangote Refinery’s reluctance to significantly adjust its gantry price despite a sharp decline in international petrol prices. Under the initial agreement, petrol was sold at ₦806 per litre for coastal delivery and ₦828 per litre at the gantry.
As global benchmarks dropped, marketers found the prices unsustainable and requested a downward review in line with international trends. According to insiders, the refinery implemented a price reduction, but it did not meet market expectations, prompting marketers to resume petrol imports in November 2025.
A source familiar with the situation told The Punch that the agreement had included a provision for monthly price reviews, tied to Eurobob, the international benchmark for European gasoline. However, the price gap between Dangote’s rates and global prices rendered the arrangement untenable.
Confirming the development, the Chief Executive Officer of petroleumprice.ng, Jeremiah Olatide, stated that while Dangote eventually reduced the gantry price, the adjustment lagged behind international market movements.
“After the first month, international prices fell sharply. Depot owners requested a significant price drop, but the reduction offered by Dangote was not competitive. This led to a surge in imports in November,” Olatide said.
He added that petrol importation spiked during the period, with numerous vessels arriving at Nigerian ports. In response, Dangote Refinery later slashed its gantry price to ₦699 per litre in December 2025, one of the steepest price cuts of the year. However, the move came too late to salvage the agreement, leaving some marketers with losses from earlier purchases at higher prices.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) confirmed a sharp rise in petrol imports during November 2025, reporting total imports of 1.563 billion litres at the height of the pricing dispute.
Further confirming the breakdown, Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said the agreement was no longer in force.
“No, the deal has collapsed. Dangote has now liberalised the market. Marketers can buy in smaller volumes, even as low as 250,000 litres,” Ukadike said.
He explained that Dangote Refinery has opened its sales to independent marketers to avoid distribution bottlenecks and encourage competition. Ukadike also disclosed that some marketers violated the agreement by continuing to import petrol even after signing the October deal, undermining its exclusivity.
Data from the Major Energies Marketers Association of Nigeria (MEMAN) showed that the spot price of imported petrol recently dropped to about ₦696 per litre, slightly below Dangote’s current gantry price of ₦699 per litre.
Industry analysts attribute the decline to lower international crude prices, reduced shipping costs, and a stronger naira, currently trading at ₦1,419.07 per dollar, intensifying competition between locally refined petrol and imports.
