Nigeria's downstream oil sector is experiencing significant disruption following Dangote Petroleum Refinery's latest price reduction, compelling petroleum marketers to suspend petrol imports temporarily. The massive refinery slashed its ex-depot price for Premium Motor Spirit by ₦49 per litre on Friday, November 8, 2025, creating challenging market conditions for import-dependent operators.
Market Turmoil Following Price Adjustment
The refinery's decision to lower prices from ₦877 to ₦828 per litre represents its second major pricing review within three months, intensifying competition in the domestic fuel supply chain. Industry experts confirm this development has made petrol importation economically unviable, particularly with the Federal Government's impending 15% import tariff on refined products.
Clement Isong, Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), acknowledged the transformative impact of Dangote's pricing strategy. "It would stop imports now, definitely, since imports are higher than Dangote's price. That is the logical thing," Isong stated during recent industry discussions.
Economic Realities Behind Import Suspension
Data from the Major Energies Marketers Association of Nigeria (MEMAN) reveals that Nigeria's average import parity price for petrol stood at ₦824.10 per litre as of November 7, 2025. This calculation incorporates a ₦1,470/$ exchange rate, 25% freight charges, and additional port expenses.
At Nigerian ports, the spot landing price was estimated at ₦830.80 per litre, slightly exceeding Dangote's new ₦828 per litre rate. Isong explained that Dangote, operating as a private refiner, establishes prices based on import parity considerations that account for global crude costs, freight expenses, and logistical factors.
The refinery monitors 30-day average prices rather than daily market fluctuations, with economies of scale, vessel capacity, and storage infrastructure significantly influencing final landing costs.
Potential Supply Chain Concerns Emerge
Despite the positive aspects of increased local refining capacity, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has expressed concerns about potential supply disruptions. PETROAN President Billy Gillis-Harry emphasized that imported products still complement the 30-35% local production from refineries including Dangote's facility.
"If import stops, product unavailability will increase. Dangote's production alone can't meet national demand," Gillis-Harry cautioned. He additionally highlighted operational challenges, noting that some marketers who have made payments for products are experiencing loading delays at Dangote's facility.
Gillis-Harry urged government authorities to reconsider the 15% import tariff implementation to prevent potential supply chain disruptions that could affect consumers nationwide.
Current retail prices continue to range between ₦850 and ₦950 across different locations, despite the refinery's price reduction. Market observers anticipate the price gap between imported and locally refined petrol will widen further when the new import duty takes effect later this month, solidifying Dangote Refinery's expanding market influence.
