By Arinze Uzo
Business News Correspondent
The Nigerian petroleum downstream sector is once again in the spotlight following reports that oil marketers have imported over ₦436 billion worth of Premium Motor Spirit (PMS) despite the operational commencement of the Dangote Refinery. This development comes amid a growing dispute between independent marketers and the management of Africa’s largest refinery, raising concerns about pricing, access, and the future of local refining in Nigeria.
Background: Dangote’s Refinery and Market Expectations
When the Dangote Refinery was commissioned in 2023, it was hailed as a potential game-changer for Nigeria’s oil and gas industry. With a refining capacity of 650,000 barrels per day, the $19 billion facility was expected to drastically reduce, if not eliminate, Nigeria’s reliance on imported petroleum products. Industry players and policymakers envisioned a significant shift toward domestic refining, enhanced energy security, and improved pricing stability.
However, nearly two years after its launch, marketers are still opting to import petrol from foreign sources. The recent figures released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) show that between January and April 2025, marketers imported over ₦436 billion worth of petrol, a move that contradicts the original expectations tied to the Dangote Refinery.
The Root of the Dispute
At the heart of the escalating tension is a dispute over pricing and supply arrangements. Independent marketers claim that the Dangote Refinery’s pricing structure does not align with current international market trends or their profit margins. According to industry sources, Dangote’s ex-depot price for petrol remains higher than what marketers can obtain through international sourcing, particularly when factoring in government forex support and port handling arrangements abroad.
“We were promised competitive pricing and priority access, but what we are seeing now is far from sustainable,” one marketer told reporters anonymously. “If we continue buying at Dangote’s rate, we’ll be forced to sell at pump prices that most Nigerians cannot afford.”
In response, the Dangote Group maintains that its pricing reflects the quality of locally refined products, exchange rate realities, and investment recovery considerations. The company has also accused some marketers of deliberately sabotaging local refining efforts to preserve their import-related profits.
Government Caught in the Middle
The federal government, through the Nigerian National Petroleum Company Limited (NNPCL) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority, has found itself caught between the need to promote domestic refining and the market realities faced by fuel marketers. While the government has repeatedly emphasized the need to patronize local refineries, it has yet to implement binding policies that compel marketers to do so.
Economic analysts warn that unless pricing frameworks and access regulations are harmonized, Nigeria risks undermining its biggest private sector investment in the energy sector. “This situation could discourage future investments in refining,” said Dr. Olufemi Ajayi, an energy economist. “If Dangote cannot compete with imports due to lack of policy support or regulatory clarity, then we are sending the wrong message to potential investors.”
Impact on Consumers and the Economy
The direct impact of the ongoing dispute is already being felt by Nigerian consumers. Fuel prices remain unstable across different regions, with some filling stations still selling above the ₦700/litre mark. Despite the local refinery being operational, Nigeria continues to spend huge amounts on foreign exchange to support petrol imports — a practice that further strains the country’s currency and foreign reserves.
Critics argue that this trend could have been avoided with better planning and stakeholder engagement prior to the refinery’s full operation. Instead, Nigeria is facing a dual challenge: a functioning mega-refinery with limited domestic uptake, and a downstream market still dependent on volatile global supply chains.
The Way Forward
Experts suggest that resolving the standoff requires a multi-pronged approach. First, there must be transparent negotiations between Dangote and the marketers to arrive at mutually beneficial pricing terms. Second, the federal government must provide policy direction — possibly through incentives, subsidies, or regulatory mandates — that encourages marketers to source from domestic refineries.
Additionally, consumer protection must remain a priority. Any resolution must consider the impact on pump prices and ensure that the average Nigerian is not burdened with artificially inflated costs due to industrial disputes.
The ongoing importation of ₦436 billion worth of petrol amid a standoff with the Dangote Refinery highlights deeper issues in Nigeria’s petroleum sector. While the refinery remains a symbol of national pride and industrial ambition, its success depends on integration into the existing market structure. Without urgent interventions, the full potential of the Dangote Refinery may remain unrealized, and Nigerians will continue to bear the cost of inefficiencies in the country’s energy supply chain.
