The fuel supply agreement between the Dangote Petroleum Refinery and major petroleum marketers has broken down, triggering a sharp rise in petrol importation across the country.
Radio Nigeria gathered that the arrangement, which involved 20 major marketers lifting about 600 million litres of petrol monthly from the refinery, collapsed over unresolved pricing disagreements barely a month after it was signed.
The deal, reached in October 2025, was designed as a pilot scheme to stabilise fuel supply and ease pressure on pump prices.
Under the agreement, each of the selected marketers was expected to lift roughly 30 million litres of petrol monthly at a fixed coastal price of ₦806 per litre and a gantry price of ₦828 per litre, subject to monthly price reviews.
However, industry sources say the agreement began to unravel in November when international petrol prices fell below the refinery’s selling price.
Marketers reportedly demanded a downward review in line with global benchmarks, but the refinery was reluctant to make immediate adjustments.
As a result, petrol imports surged sharply.
Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority show that total petrol imports rose to about 1.56 billion litres in November 2025, coinciding with the height of the dispute.
Sources explained that the pricing structure was tied to international benchmarks, with the understanding that prices would be reviewed monthly.
When global prices dropped to levels around ₦750 per litre, marketers turned to imports, which they found cheaper than locally refined products at the time.
Although Dangote Refinery later reduced its gantry price to ₦699 per litre — the lowest recorded in 2025 — the adjustment came after many marketers had already incurred losses on products purchased at higher prices.
Depot owners who lifted fuel at ₦828 per litre in October were said to be among those hardest hit, while smaller marketers struggled to adjust to the sudden price shift.
Confirming the collapse of the agreement, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, said the deal was no longer in force.
According to him, the refinery has now opened its sales to all marketers, including independents who can lift as little as 250,000 litres, a move aimed at liberalising supply and encouraging competition.
Industry analysts note that the breakdown of the agreement has effectively returned the market to an open system, with both locally refined fuel and imported products competing side by side.
Meanwhile, latest market figures indicate that the spot price of imported petrol at the Apapa jetty has dropped to about ₦696 per litre, slightly below the refinery’s current gantry price.
Analysts say the development could further intensify competition in the downstream sector and influence retail pump prices in the coming weeks.
Efforts to obtain official comments from the Dangote Group were unsuccessful as at the time of filing this report.