A supply agreement between the Dangote Petroleum Refinery and 20 major petroleum marketers has collapsed barely a month after it was reached, following disagreements over petrol pricing, industry sources have confirmed.
The deal, struck in October 2025, was designed as a pilot arrangement under which selected marketers would collectively offtake about 600 million litres of petrol monthly from the refinery. Each marketer was expected to lift roughly 30 million litres, serving as primary distributors to other dealers in a bid to stabilise supply and moderate pump prices.
However, the arrangement broke down in November after marketers complained that Dangote’s prices were not adjusted in line with falling international benchmarks. The dispute coincided with a sharp rise in petrol imports, which climbed to 1.563 billion litres in November 2025, according to data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
Industry sources said the agreement included a provision for monthly price reviews tied to global benchmarks. Under the initial terms, petrol was sold at N806 per litre for coastal deliveries and N828 per litre at the gantry. Dangote also suspended large-scale sales to independent marketers, forcing them to buy through the approved distributors.
Problems emerged when international petrol prices declined below Dangote’s selling price, prompting marketers to demand a sharper reduction. While the refinery later cut its gantry price to N699 per litre, the move came after import volumes had already surged, leaving some depot owners and marketers with losses on previously purchased stock.
Market data from industry groups showed that the landing cost of imported petrol fell below locally refined prices during the period, making imports more attractive to marketers.
Confirming the development, the Independent Petroleum Marketers Association of Nigeria said the agreement was no longer in force. Its National Publicity Secretary, Chinedu Ukadike, explained that the refinery has reverted to open-market sales, allowing any marketer to buy products in volumes as low as 250,000 litres.
He added that the decision was partly influenced by continued imports by some marketers despite the exclusivity agreement, which undermined the arrangement.
As of now, Dangote Refinery has liberalised its sales strategy, opening access to both major and independent marketers amid ongoing price competition in the downstream petroleum market.
