The fuel supply agreement between the Dangote Petroleum Refinery and 20 major petroleum marketers—under which the parties had planned to offtake 600 million litres of petrol monthly, has collapsed due to pricing disagreements.

Findings also indicate that the dispute triggered the surge in petrol imports recorded in November 2025, when total import volumes climbed to 1.563 billion litres, according to the Nigerian Midstream and Downstream Petroleum Regulatory Authority, according to The Punch.

The regulator disclosed the figure in its November 2025 fact sheet, titled State of the Midstream and Downstream Sector, which highlighted a sharp increase in imported volumes during the period the pricing disagreement escalated.

Recall that the agreement, reached in October 2025, was designed as a pilot scheme under which 20 depot owners were to collectively offtake about 600 million litres of petrol each month, with each marketer lifting roughly 30 million litres from the Dangote Refinery.

The National Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, had confirmed in an interview that the refinery set the target following a strategic meeting with key players in the downstream sector.
Ukadike explained that the agreement was aimed at stabilising domestic supply and easing the recent spike in pump prices.

He said the meeting attended by representatives of A.Y.M. Shafa, A. A. Rano, NNPCL Retail, Salbas, and several other major distributors, focused on streamlining product allocation and cutting out layers of middlemen blamed for price distortions.

“At the meeting, Dangote announced plans to sell to only 20 selected marketers who will serve as primary distributors to other dealers. Each of them will lift a minimum of two million litres, which will translate to about 600 million litres every month.

“We believe that once this structure takes effect, petrol availability will improve significantly and retail prices will start to ease,” Ukadike said.

However, two industry sources confirmed on Thursday that the deal, which lasted barely a month, has collapsed, blaming the breakdown on the refinery’s refusal to adjust its gantry price in line with declining international benchmarks.

According to one of the sources, an industry stakeholder who requested anonymity due to the sensitivity of the matter, the agreement provided for monthly price reviews. At the outset, products were sold to marketers at N806 per litre for coastal delivery and N828 per litre at the gantry.

As part of the arrangement, Dangote temporarily halted direct sales to independent marketers, who were restricted to purchasing 250,000 litres or less, effectively compelling them to depend on the 20 approved marketers for supply.

The source said, “The arrangement between Dangote and 20 marketers has collapsed. Remember that there was an agreement in October, and they agreed on a particular price, and that every month, there will be a price review. So in the month of October, the price was shifted for the marketers, and they were given products at N806 per litre and sold gantry at N828 per litre.

“That was fixed, and they now stopped all forms of product sales to independent marketers who were only buying 250,000 litres or less. Due to the agreement, marketers who needed products had to go buy from the 20 marketers. This is because the marketers had mentioned in the agreement that Dangote won’t sell directly to other marketers but only to the approved members, and then the rest would buy from them.”

The official added that the arrangement initially operated smoothly, with products loaded through both ships and gantries, while additional interested parties were gradually added to the list of approved marketers.

The agreement started to break down in November when importers realised that global petrol prices had dropped below Dangote’s selling price.

“But the agreement had a bit of issues in the month of November when importers saw prices at the international benchmark and that it was lower than the price Dangote was selling to them. They said it was supposed to drop to around N750 per litre. But Dangote was reluctant to review. This caused the heavy influx of imported petrol in November,’ the source stated.

In response, Dangote later cut its gantry price to N699 per litre, the lowest level in 2025, but the reduction came too late to avert losses.

The source disclosed that depot owners and marketers who bought products at N828 per litre in October but had yet to sell were left with significant losses, while smaller marketers also struggled to adjust to the abrupt price shift.

Data from the Major Energies Marketers Association of Nigeria and petroleumprice.ng during the period showed that the average landing cost of imported premium motor spirit fell to N829.77 per litre, lower than the ex-depot price of locally produced fuel.

MEMAN data showed that the average landing cost of petrol stood at N829.77 per litre as of October 30, reflecting a continued decline from earlier levels—N849.61 on October 13, N847.61 on October 14, N841.54 on October 20, and N839.97 per litre on October 21.

By contrast, Dangote Refinery’s gantry price remained at N877 per litre as of October 24, 2025.

He added that the dispute escalated into a public confrontation between Dangote and the former NMDPRA boss, Farouk Ahmed, over the agency’s issuance of multiple import licences to other marketers, a clash that ultimately culminated in the ACE’s resignation in December 2025.

“Now there is no agreement or alignment between Depot owners and Dangote. The refinery is now selling to another marketer that can offtake any quantity of products,” the source stated.

Confirming the industry stakeholder’s account, the CEO of petroleumprice.ng, Jeremiah Olatide, stated that the deal’s pricing mechanism was linked to Eurobob, the international benchmark for European gasoline, with prices set to be reviewed monthly based on global crude oil movements.

Under the initial arrangement, Dangote set a coastal price of N806 per litre and a gantry price of N828 per litre.

He explained that after the first month, the international crude oil benchmark fell sharply, prompting depot owners to request a reduction in the gantry price. Although Dangote implemented a price adjustment, it fell short of expectations relative to global prices.

“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 N806 coastal rate and N828 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 N828 per litre to N699 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.”