The landscape of Nigeria's downstream petroleum sector is undergoing a seismic shift, driven by the aggressive market strategy of the Dangote Petroleum Refinery. A dramatic surge in activity at the Lekki-based facility has seen daily gantry loadings skyrocket to over 2,000 trucks, as fuel marketers rapidly abandon traditional private depots in favor of the refinery's more competitive offerings.
Price Slash Triggers Market Exodus
The primary catalyst for this realignment is the refinery's decisive move to set its ex-depot price for Premium Motor Spirit (PMS), commonly known as petrol, at ₦699 per litre. This benchmark price has proven irresistible to marketers, many of whom were grappling with higher landing costs at private depots due to reliance on imports. Faced with an inability to match this new price point, numerous depot operators have been compelled to implement defensive, reactive price cuts in a desperate bid to retain their customer base.
Industry analysts describe the situation as a turning point, where Dangote Refinery has effectively established a de facto reference price. This move has compressed profit margins across the entire downstream value chain and is forcibly redrawing the nation's long-established fuel supply routes. The refinery is rapidly eclipsing traditional coastal depots to become Nigeria's busiest fuel distribution hub.
Inclusive Policies Empower Smaller Marketers
Beyond the attractive pricing, Dangote Refinery has implemented strategic policy changes that are broadening market participation. A significant move has been the reduction of the minimum purchase volume from 2 million litres to 250,000 litres. This adjustment has thrown open the doors for independent and regional marketers who were previously locked out by prohibitive volume requirements.
Furthermore, the introduction of a 10-day bank guarantee framework has eased significant cash flow constraints for buyers. This system allows marketers to commence loading products while finalising their payment documentation, reducing costly waiting times at the gantry. According to logistics reports, loading activities are now a round-the-clock operation at the refinery site.
Industry Backing and Future Implications
The momentum behind this shift received a major institutional boost when the Independent Petroleum Marketers Association of Nigeria (IPMAN) urged its nationwide members to source petrol directly from Dangote Refinery. IPMAN President, Abubakar Maigandi Shettima, highlighted that the association controls over 80% of retail outlets and cited the refinery's consistent supply as a key factor in reducing scarcity risks.
Looking ahead, the market consolidation is expected to intensify. The refinery has announced the planned resumption of free direct delivery of PMS to retail stations nationwide, expected to commence in January 2026. Analysts predict this will further erode any remaining cost advantages held by private depots and solidify the dominance of domestic refining in Nigeria's fuel supply chain. This represents one of the most profound structural changes to the market in decades, with long-term implications for pump price stability and national energy security.
