Dangote Refinery Deal with 20 Oil Marketers Falls Through, Fuel Imports Surge
The Dangote Refinery’s pilot supply arrangement with 20 oil marketers, designed to distribute 600 million litres of fuel monthly, has reportedly collapsed.
The deal, established in October 2025, aimed to streamline domestic fuel distribution by allocating approximately 30 million litres of gasoline per month to each selected marketer.
According to anonymous sources, the breakdown of the agreement was primarily due to disagreements over pricing. Under the initial terms, marketers received fuel at a set price, with monthly price reviews.
In October, for example, the product was sold to marketers at N806 per litre and subsequently at N828 per litre at the gantry.
The collapse of the arrangement effectively halted sales to independent marketers purchasing smaller quantities, forcing them to buy from the 20 designated distributors.
The dispute contributed to an increase in fuel imports in November, with the Nigerian Midstream and Downstream Petroleum Regulatory Authority reporting imports of over 1.5 billion litres during that period.
Chinedu Ukadike, National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, confirmed that the refinery had initially designed the scheme following strategic consultations with key stakeholders in the downstream sector.
The initiative was intended to reduce the spike in pump prices and stabilize fuel supply across the country.
The original plan envisioned the 20 marketers serving as primary distributors to other dealers, lifting a minimum of two million litres each, collectively totaling around 600 million litres per month.
The strategy aimed to simplify product distribution, reduce the number of intermediaries, and curb pricing distortions in the domestic market.
“With this structure in place, fuel availability was expected to improve, and retail prices were projected to ease,” Ukadike said. However, the recent pricing disagreement has disrupted the arrangement, underscoring ongoing challenges in coordinating Nigeria’s domestic fuel distribution.
The collapse of the pilot program highlights the complexities of balancing supply, pricing, and distribution in Nigeria’s downstream petroleum sector, and raises questions about the effectiveness of similar centralized distribution initiatives in stabilizing the domestic market.
