Nigeria’s downstream petroleum sector is gripped by a new wave of tension as independent oil marketers have resumed large-scale petrol importation, sidelining the $20bn Dangote Petroleum Refinery despite its growing production output.
In just nine days, over 496 million litres of Premium Motor Spirit (PMS) valued at approximately N436.37bn were imported into the country, reinforcing a deepening row between private importers and the continent’s largest refinery.
Fresh data obtained from the Tanker Position Report, sourced via Blue Sea Maritime, showed that 370,000 metric tonnes of PMS were discharged at key depots between May 11 and 20. This surge coincides with comments made earlier in the month by Dangote Group President, Aliko Dangote, who lamented the refinery’s ongoing struggle against entrenched interests and unfavourable market dynamics.
According to Dangote, despite the refinery’s improved output and capacity, bulk buyers continue to import petrol instead of patronising the Lagos-based mega facility, frustrating efforts to stabilise local supply through domestic refining.
Industry insiders suggest the refinery’s pricing model is a key stumbling block. Marketers argue that the refinery’s prices are not competitive compared to international import rates, especially when factored with the favourable freight conditions currently supporting global supply chains.
“There’s something wrong with Dangote’s pricing template,” said Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN). “The surge in imports shows marketers are sourcing from cheaper alternatives. If Dangote was competitive, importers wouldn’t go abroad.”
Further insights from the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) reveal a troubling trend—over 70% of retail outlets under the association’s umbrella have shut down, unable to cope with volatile pricing and unstable operating conditions.
PETROAN President, Billy Gillis-Harry, warned that the sector is veering dangerously close to a monopolistic gamble reminiscent of Indian billionaire Mukesh Ambani’s strategy to dominate the oil market by absorbing losses.
“We commend Dangote’s ambition,” he said, “but it should not come at the cost of killing the market. We need predictable pricing, not volatility.”
Pinnacle Oil emerged as the top importer during the nine-day window, receiving over 208 million litres of petrol, accounting for nearly half of the week’s total volume. Other key players include AA Rano, Sunbeth, OBAT, Rainoil, Matrix, and Prudent Energy, who together imported more than 167 million litres.
Vessels carrying an additional 56,000MT were also scheduled to berth at Lagos and Calabar ports on May 20, suggesting import momentum remains strong.
Sources say part of the preference for foreign-sourced PMS lies in creative tax management strategies. Togo’s Lome offshore market has increasingly served as a staging hub, where large cargoes are broken down into smaller loads to reduce tax exposure and bypass naira-based transactions—despite government pressure to localise dealings.
The Dangote Refinery, for its part, has built the infrastructure to handle massive distribution, boasting the ability to load up to 2,500 trucks per day. However, oil and gas analyst Olatide Jeremiah noted that this operational advantage has cut deep into the traditional revenue streams of depot owners and importers, triggering a commercial face-off.
“Many private depot operators now see Dangote’s capacity as a threat. That’s why they’re reverting to importation,” Jeremiah explained. “It’s a war of market dominance.”
Renowned energy economist, Professor Wumi Iledare, described Nigeria’s downstream market as “structurally anticompetitive.” He criticised the government’s reliance on imports to drive price competition, saying it weakens the naira, drains forex reserves, and prevents local pump price reductions.
“Import dependency is not the solution,” he said. “We must regulate market behaviour to prevent profiteering and enforce fair pricing.”
Iledare recommended price modulation as a strategic alternative until domestic refining gains full market traction.
As marketers and depot owners double down on imports and sideline local production, Nigeria’s dream of energy self-sufficiency through the Dangote Refinery appears caught in the crossfire of market competition and economic survival. While the refinery symbolises a transformative industrial milestone, it now faces the harsh realities of a free-market battleground where price, access, and profit rule supreme.