The fuel supply arrangement between Dangote Petroleum Refinery and 20 major petroleum marketers, under which the parties had agreed to offtake 600 million litres of petrol monthly, has collapsed due to pricing disagreements.
The deal, which was initially seen as a strategy to stabilise domestic fuel supply, was reached in October 2025 but lasted only one month.
According to multiple sources, the collapse of the arrangement was driven by Dangote’s reluctance to adjust its gantry price in response to declining international petrol prices.
The marketers, who were initially buying petrol at ₦806 per litre for coastal delivery and ₦828 per litre at the gantry, found the prices unsustainable after international benchmarks dropped below Dangote’s rates.
A source familiar who spoke with Punch on the situation stated, “The agreement, which was structured to include monthly price reviews, became untenable when international petrol prices fell below Dangote’s selling price. They said it was supposed to drop to around ₦750 per litre, but Dangote was reluctant to review the prices, which led to an influx of imported petrol in November.”
Confirming the position of the industry stakeholder, the Chief Executive Officer of petroleumprice.ng, Jeremiah Olatide, said the pricing mechanism for the deal was tied to Eurobob, the international benchmark for European gasoline, with the understanding that prices would be reviewed monthly in line with global crude oil movements.
Under the initial arrangement, Dangote published a coastal price of ₦806 per litre and a gantry price of N828 per litre.
He explained that after the first month, the international crude oil benchmark declined sharply, prompting the depot owners to request a reduction in the gantry price. While Dangote implemented a price adjustment, it fell short of expectations when compared with international prices.
He said, “Yes, it has collapsed. It was agreed that the process would be determined by Eurobob, which primarily refers to the benchmark price for European gasoline (petrol), that is the international benchmark. That for every benchmark, the price would be discussed and agreed to be adjusted.
“They agreed on ₦806 coastal rate and ₦828 gantry price as published by Dangote refinery. After the first month, the international crude oil benchmark dropped, and the private depot owners requested a reduction in the Dangote gantry price. The reduction was effected but not what they expected in comparison with international prices. It was this difference that made the marketers turn to imports in the month of November 2025.
“Importation surged in November, and there were a large number of vessels at berth. So when Dangote noticed the new development, he slashed the price from ₦828 per litre to ₦699 per litre, a 129 per cent reduction and the highest in 2025. Days later, he had a press conference, making allegations against the former NMDPRA ACE, Farouk Ahmed, on the issuance of licenses to marketers.
“So the relationship between depot owners and Dangote lasted for just a month before falling apart. Now the refinery doesn’t have a choice but to sell to independent marketers who buy in bits.”
The dispute significantly contributed to the surge in petrol imports, with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) reporting a sharp rise in imported volumes during November 2025. Imports reached 1.563 billion litres, with the authority noting the increase coinciding with the height of the price dispute.
As the price discrepancy became apparent, Dangote Petroleum Refinery eventually lowered its gantry price to N699 per litre in December 2025, but this move came too late to prevent the fallout, including heavy losses for marketers who had bought products at higher prices.
Confirming the breakdown of the deal, the National Publicity Secretary of IPMAN, Chinedu Ukadike, told The Punch that the agreement was no longer in force.
He said, “No, it is no longer in place. Dangote has decided to liberalise the buying options. Marketers are now free to buy products, even down to those who can lift as little as 250,000 litres.”
He added that the refinery had specifically invited independent marketers to come forward and load products directly.
“These are market strategies. You don’t want unnecessary issues in distribution or artificial price hikes. The market is now open. It is also about competition,” he said.
Ukadike explained that tensions also arose because some marketers continued importing petrol even after signing the October agreement, undermining the exclusivity clause.
“Even after the agreement was signed, some marketers still went ahead to start importing petroleum products, which is against the agreement signed. So he decided that since they are keeping to it or evacuating products well, he has decided to allow all marketers to take products. That is the situation on the ground,” he added.
Data from MEMAN (Major Energies Marketers Association of Nigeria) highlighted a significant drop in the spot price of imported petrol to about ₦696 per litre.
This was below Dangote Refinery’s current gantry price of ₦699 per litre, creating opportunities for marketers to optimise inventory and adjust to market fluctuations.
The decline in spot prices reflects a combination of lower international crude oil prices, lower shipping costs, and a stronger naira, now trading at ₦1,419.07 per dollar. These factors have provided relief for marketers and consumers, while Dangote Petroleum faces pressure to compete with imports.