In a significant strategic shift, the Dangote Petroleum Refinery has commenced the direct sale of Premium Motor Spirit (PMS), commonly known as petrol, to independent oil marketers across Nigeria. This move effectively bypasses the traditional network of private depot owners who previously controlled distribution.
Breakdown of Pricing Agreement Triggers New Sales Model
The decision to sell directly stems from a collapsed pricing arrangement between the refinery and approximately 20 depot operators. According to industry expert Jeremiah Olatide, CEO of Petroleumprice.ng, both parties had initially agreed to use Eurobob, the European gasoline benchmark, to guide pricing. Prices were to be adjusted in line with fluctuations in this international standard.
Under this deal, Dangote Refinery set its prices at N806 per litre for coastal sales and N828 per litre at its gantry. However, when global crude oil prices fell after the first month, depot owners demanded a corresponding reduction. Although the refinery lowered its prices, the depot operators felt the adjustment was insufficient and did not fully reflect the international market movement.
Marketers Turn to Imports, Forcing a Major Price Cut
This pricing disagreement had immediate consequences. In November 2025, frustrated marketers significantly increased their importation of refined petrol. This surge led to notable congestion at Nigerian ports, with numerous vessels waiting to discharge imported fuel.
In a bold response to this growing competition from imports, Dangote Refinery executed a dramatic price reduction. The refinery slashed its gantry price from N828 to N699 per litre, a substantial drop of N129. This reduction, recorded in 2025, stands as the steepest single price cut of the year.
Consumers Benefit from Intense Price War
The direct sales model and subsequent price cut are the latest developments in a nearly year-long price war between Dangote Refinery and major oil marketers. The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has revealed that this intense competition resulted in billions of naira in losses for its members in 2025.
Despite these industry losses, the Group Chief Executive Officer of the Nigerian National Petroleum Company Limited (NNPCL), Mr. Bayo Ojulari, has stated that the fierce rivalry is ultimately advantageous for the Nigerian consumer, leading to lower prices at the pump.
To qualify for direct purchases from the refinery, independent marketers must be able to buy a minimum of 250,000 litres per transaction. This new system moves products closer to retail filling stations, potentially improving efficiency and supply chain dynamics.
In related news, Dangote Refinery has confirmed that its production and distribution operations are running smoothly. Officials disclosed that the refinery supplied over 43 million litres of petrol, with the volume loaded on Saturday, January 3, 2026, alone being sufficient to cover more than half of Nigeria's estimated daily demand. This clarification was issued to dispel rumours of a maintenance shutdown and to reassure the public that there is no imminent threat of fuel scarcity.
