Dangote Refinery Halts Petrol Sales and Announces Price Increase Amid Operational Adjustments
In a significant development that is sending shockwaves through Nigeria's energy sector, the Dangote Petroleum Refinery and Petrochemicals FZE has reportedly suspended all sales of Premium Motor Spirit, commonly known as petrol. This strategic move comes alongside a substantial price increase that is expected to impact consumers nationwide.
Sales Suspension Disrupts Existing Supply Agreements
The refinery has effectively cancelled all active petrol deal recaps with customers across Nigeria, according to industry reports. These deal recaps typically outline crucial commercial terms including agreed volumes, pricing benchmarks, delivery timelines, and payment conditions. The sudden cancellation places previously arranged petrol supply agreements on indefinite hold, creating uncertainty in the downstream market.
While the refinery has yet to officially confirm these developments, market sources indicate that the suspension notice was circulated to counterparties and signed by the Group Commercial Operations team. The communication did not specify when new terms would be issued or when revised delivery schedules might resume, leaving marketers and distributors in a state of limbo.
Maintenance Activities Drive Operational Realignment
Industry analysts point to a combination of operational adjustments and mounting demand pressures as key factors behind the refinery's decision. At the center of these developments is a planned, short-term shutdown of the facility's crude distillation unit, a critical component that processes crude oil into feedstock for downstream units.
Shipping and flow data reveal that crude inflows into the refinery slowed significantly in January, averaging approximately 290,000 barrels per day compared to roughly 440,000 barrels per day recorded in December. With reduced feedstock availability, operating the CDU below optimal capacity would prove inefficient, prompting the refinery to align throughput levels with available crude during the maintenance window.
Gasoline Production Faces Additional Strain
Pressure on petrol supply has been further intensified by ongoing maintenance work on the refinery's residue fluid catalytic cracker, the primary unit responsible for gasoline production. While the RFCC remains offline for planned maintenance, Dangote has reportedly relied on blending components from other units to sustain petrol output.
However, rising demand for locally refined fuel, combined with reduced operational flexibility, appears to have necessitated a strategic shift. Market participants suggest the refinery is now prioritizing inventory management and internal balancing over fixed commercial supply commitments, reflecting a more cautious approach to market engagement.
Price Hike Compounds Market Uncertainty
Compounding the sales suspension, the mega refinery has announced a significant increase in the gantry price of Premium Motor Spirit from N699 per litre to N799 per litre. This price adjustment follows the conclusion of the festive period and represents a substantial jump that will likely impact retail prices across Nigeria.
According to industry reports, the refinery management announced the price hike in a statement released on Monday evening, noting that petrol will now sell for N839 per litre at MRS filling stations. This dual development of sales suspension and price increase creates a complex scenario for Nigeria's fuel market.
Wider Implications for Nigeria's Downstream Market
Nigeria's downstream fuel market remains highly sensitive to operational changes at major refining facilities, particularly given the country's historical dependence on imported petroleum products. The market is shaped by multiple factors including fluctuating crude prices, persistent logistics bottlenecks, and ongoing regulatory uncertainties.
In this challenging environment, refiners and marketers are increasingly adopting flexible trading models to manage risk and preserve margins. Although regulatory authorities maintain that nationwide fuel supply remains adequate with strong inventory levels, Dangote Refinery's trading decisions carry significant influence given its growing role in domestic fuel supply.
As Africa's largest refinery with a nameplate capacity of 650,000 barrels per day, any adjustment in Dangote's PMS strategy quickly reverberates across depots, marketers, and ultimately pump prices nationwide. Industry insiders describe the CDU maintenance as strategic and temporary, emphasizing that it represents routine optimization rather than deeper operational challenges.
Market Response and Future Outlook
Market reactions indicate downstream implications as fuel supply dynamics shift in Nigeria. The refinery continues to adjust unit coordination as it transitions from its ramp-up phase toward more stable output, with industry data and regulatory assurances suggesting the impact on overall fuel supply will be minimal despite the temporary disruptions.
As of current reporting, Dangote Refinery has yet to issue further guidance on when new PMS deal recaps will be released or whether revised commercial terms will follow immediately. Market watchers anticipate clearer signals once maintenance activities conclude and demand pressures begin to ease, providing more stability to Nigeria's refining landscape.
The 650,000 barrels-per-day facility is set to shut down its crude oil distillation unit for approximately one week, a move that reflects operational fine-tuning in a fuel-dependent economy. While any shutdown at the Lekki-based mega refinery tends to generate market anxiety, industry experts view this as part of normal refinery operations aimed at long-term efficiency and reliability.
