A fresh wave of Premium Motor Spirit (petrol) importation into the country has made the row between oil marketers and the Dangote Petroleum Refinery to linger, amid signs of deepening tensions in Nigeria’s downstream oil sector.
This row deepened after independent oil marketers resumed large-scale importation of petrol, as fresh data shows that over 496.17 million litres of petrol were brought into the country within nine days.
Two weeks ago, the President of Dangote Group, Alhaji Aliko Dangote, declared that his $20bn refinery was still “fighting for survival”. The business mogul’s remarks were triggered by the continued importation of petrol and the reluctance of major marketers to buy in bulk from the refinery, despite its increased production capacity and improved output of petroleum products.
He stated at an event that the battle with entrenched oil cabals, one that began even before the refinery commenced full operations, was still ongoing.
The business mogul’s fears now appear to be confirmed, as fuel imports have surged significantly in recent weeks. The PUNCH findings using the Tanker Position Report, a document that tracks oil tankers’ movement and was obtained from Blue Sea Maritime by our correspondent on Monday, revealed that a total of 370,000 metric tonnes of petrol were discharged at various depots. These products berthed at sea ports between May 11 and 20, 2025.
Going by the conversion rate of 1,341 litres to one metric tonne, it, therefore, implies that the marketers utilising scarce foreign exchange brought in about 496.17 million litres of petrol within the period.
With an average landing cost of N879.48 per litre, importers may have spent a total sum of N436.37bn on PMS imports. This is in addition to N2.42tn spent in 70 days between March 1 and May 9, 2025, and N4.51tn spent on the same purpose between October 2024 and February 2025.
Industry sources say the development is a result of a growing friction between private fuel importers, depot owners, and the Dangote Petroleum Refinery, rooted in what stakeholders describe as unfavourable business conditions.
Industry sources revealed that many marketers are deliberately opting to import Premium Motor Spirit rather than purchase from the refinery, citing a combination of economic and operational challenges.
Key among the grievances is the pricing model adopted by the refinery, which marketers say is not competitive when compared to international import options. In addition, sources said unfavourable business terms and gantry loading, among others, have pushed importers into importation.
This coincided with a PUNCH report that reduced output from the Dangote Petroleum Refinery due to an unscheduled maintenance, supported a bounce in West African import demand, as the market reverted to European supplies to serve regional demand.
According to S&P Global Commodities at Sea data, gasoline imports to Nigeria and Togo surged from around 200,000 barrels per day in January to over 300,000 barrels per day in March, and roughly 250,000 b/d in April, close to Nigeria’s total of around 300,000 b/d of national demand.
Market sources observed that Togo became an increasingly important channel for Nigerian imports as traders have drawn growing volumes to the offshore Lome market, where supplies are then loaded from large cargoes onto smaller vessels.
The trend to import supplies to Lome and breakbulk has been motivated by financial incentives to reduce tax exposure and continue purchases in US dollars, sources said, as the Nigerian government has made a push for companies to transact in naira.
Strong flows to West Africa have been aided by soft freight costs. Platts assessed the Clean Long-range UKC-West Africa rate at $22.68/mt on May 12, down from $28.25/mt the previous year.
This development is further confirmed by import documents, which revealed that a total of 370,000 metric tonnes were imported within nine days.
The depots receiving the product include strategic facilities in Lagos, Warri, and Calabar, marking one of the highest weekly import volumes recorded this year, amid foreign exchange challenges.
A further breakdown showed that Pinnacle Oil led the surge. The depot stationed very close to the Lekki-based plant received 152,000MT of petrol, translating to 208.83 million litres, which accounts for nearly 49.60 per cent of the week’s nationwide PMS deliveries.
Also, seven independent petroleum marketers collectively imported over 167 million litres of PMS during the review period, according to the latest import schedule. AA Rano, via the AITEO/LESTE terminal, accounted for the largest volume with 40.23 million litres. Sunbeth followed with 26.82 million litres delivered at the Menj Jetty. Other contributors—OBAT, Rainoil, Matrix, Prudent Energy, and Mainland (Calabar)—each brought in 20.12 million litres, underscoring the growing role of private players in sustaining fuel supply amid ongoing market pressures.
Further analysis showed that three vessels conveying 56,000MT are expected to berth at the Lagos Apapa port and the Calabar port today, Tuesday, May 20, 2025.
Stakeholders who spoke to The PUNCH said that the sudden surge in imports suggests marketers may have turned away from local sourcing in favour of direct importation, a move believed to be driven by widening margins at the depot level and mounting supply pressures.
Depot prices for PMS have reportedly surged in recent days, further complicating distribution and pricing across the downstream market. While exact figures remain fluid, marketers cited landing costs and logistics as key contributors to the upward adjustment.
The Independent Petroleum Marketers Association of Nigeria, National Publicity Secretary, Chinedu Ukadike, said the full deregulation of the downstream segment allowed marketers to freely source products, but noted that the abnormal import surge is indicative that something is wrong in the sector.
Ukadike, who spoke in a telephone interview on Monday, suggested it may be a sign of deeper issues with the Dangote Petroleum Refinery’s pricing strategy.
The national officer said the downstream petroleum market has become a battleground for survival as marketers weigh their options between importing fuel and sourcing from the Dangote refinery.
He stated, “Like I have always maintained, the market has been liberalised and there is not atom of regulation at all. It has now become a survival of the fittest and a price war. So, if Dangote’s price is actually cheaper for those importers, I don’t think they would do so (continue importing). Those who are importing are essentially businessmen who also want to make a profit. The refinery has said it has enough petroleum products to meet local demand and take care of the needs of the country.
“But the NMDPRA has said Dangote has a shortfall in supply, and when the authority in the downstream sector has spoken, it reveals the true situation of things. However, this surge in imports didn’t happen in previous months, it may likely indicate that there is something wrong with Dangote’s template on pricing. The new surge definitely means something is wrong somewhere, and maybe Dangote is not giving Nigerians the actual cost of petroleum products, which has allowed marketers to import and still sell, and they are not running at a loss. There is something on the borderline that needs to be cleared.
“For us as independent marketers, our own concern is to ensure the availability of products. We don’t want the interruption in the supply of petroleum products, whether locally or internationally. So whatever, we would be able to contribute to ensure the supply and bring down the petroleum. It is a win-win situation. Pinnacle has its own customer base, tricks and tactics to the distribution of products, as well as Dangote. These companies are big players in the downstream and gas industry.
“I also know that sometimes the Nigerian National Petroleum Company Limited uses Pinnacle and Matrix to bring in products. These companies have outlets too. People are free to import products for their own outlets, and they are selling them. Dangote is using MRS too. So it’s a free market.”
The Petroleum Products Retail Outlets Owners Association of Nigeria President, Billy Gillis-Harry, said that more than 70 per cent of the association’s over 7,000 retail outlets have shut down due to unsustainable operating conditions and lack of pricing stability in the downstream oil sector.
“Over 70 per cent of our retail outlets are closed and out of business today,” Gillis-Harry disclosed. “And the reason is that we struggle to take loans from the banks, purchase products, and before we even get to our filling stations, prices have either gone up or been slashed without any justifiable reason.”
He said the current volatility in fuel pricing has left marketers exposed to losses and made it nearly impossible to plan or remain competitive, forcing many to seek alternative sources of supply that offer stability and relief.
“That situation has forced us to source products from those who can give us a soft landing, so we can recover and compete,” he explained. “If someone knows that fuel is available and affordable, there’s no need for Nigerians to queue endlessly. But if there’s no liquidity to stock or restock, it naturally leads to scarcity and price hikes.”
Gillis-Harry warned that Nigeria may be sliding into a risky experiment akin to the strategy once adopted by Indian oil magnate Mukesh Ambani, who reportedly sustained massive losses to gain long-term market dominance.
“Right now, the current scenario reminds me of Mukesh Ambani. He had a vision of losing $25bn in 180 days and gaining three times that in 30 days—and he achieved it. We fear that this might be the same kind of market experiment playing out in Nigeria,” he said.
While commending the ambition and potential of the Dangote refinery, the PETROAN president cautioned that the project’s success must not come at the cost of destroying smaller market players who are already grappling with survival.
“I am happy about the Dangote Refinery. But if that happiness results in me being thrown out of business, how do I foot my bills? What then is the happiness about?” he queried.
According to Gillis-Harry, PETROAN members are left with no choice but to patronise fuel sources that offer predictable pricing and reduced risk.
“We will gladly patronise any source of products that would not expose us to the kind of fluctuation that is currently wrecking our businesses,” he added.
An oil and gas expert, Olatide Jeremiah, confirmed that the situation has sparked a deepening business conflict between importers, depot owners, and the refinery.
He said the refinery’s massive gantry loading capacity has significantly reduced the market share of traditional fuel importers, intensifying competition and triggering fresh business tensions in the industry.
“The gantry loading capacity of over 2,500 trucks daily at Dangote Refinery has diminished 50 per cent of the sales made by fuel importers,” he said. “Most of these importers now sell through their retail outlets just to stay afloat.”
“I can categorically tell you that there is a business conflict, and that’s why private depot owners and importers would rather continue importing than patronising the Dangote Refinery,” Jeremiah stated. “Unfair pricing, unfavourable business terms, and gantry loading constraints are all pushing many players back into importation. It’s a game of survival now.”
According to him, long-standing importers and depot operators, many of whom pioneered the liberalisation of the sector, are leveraging their experience and global contacts to beat Dangote on landing cost.
“Don’t forget, importers and depot owners are pioneers and major stakeholders in the downstream sector,” he noted. “They will always find their way around cheaper landing costs in order to beat the competition posed by Dangote Refinery.”
Also speaking, renowned energy economist Prof Wumi Iledare, raised concerns over the structural inefficiencies in Nigeria’s downstream petroleum sector, describing it as “largely anticompetitive” and dominated by a few influential players who are locked in a struggle for market share and profit maximisation.
Speaking with The PUNCH, Iledare said the Federal Government’s continued reliance on fuel imports to drive competition has worsened the situation, putting pressure on the naira, draining foreign reserves, and preventing pump price reductions despite a global decline in crude oil prices.
“The Nigerian petroleum market remains largely anticompetitive, dominated by a few influential firms competing for market share and producer surplus,” Iledare said. “Reliance on imports to boost market participation has been counterproductive. It exerts pressure on the naira, depletes external reserves, and prevents petrol price reductions even when crude oil prices fall.”
According to him, the dependence on imported fuel not only reflects governance challenges but also worsens systemic inefficiencies in the market, creating instability and economic disruptions.
“This dependency highlights governmental inadequacies and exacerbates market problems, disrupting both efficiency and economic stability,” he noted.
Rather than using importation as a tool to balance the market, Iledare argued that more attention should be given to regulating the behaviour of market participants and enforcing fair competition across the board.
“Effective regulation should focus on ensuring fair competition, not merely controlling market shares to drive down prices,” he explained. “Regulating conduct, not just structure, is more effective in tackling anticompetitive practices.”
He recommended a strategic shift toward price modulation, particularly now that domestic refining capacity, led by the Dangote Refinery, is still facing integration challenges.
“An improved pricing strategy would involve price modulation, especially given the government’s current dependence on imports to apply competitive pressure,” Iledare said.(Punch)
