The Dangote Petroleum Refinery and Petrochemicals has suspended coastal sales of Premium Motor Spirit (PMS) to depot owners and importers in Lagos, a move that is intensifying pressure on the state's fuel market. The suspension coincides with petrol prices crossing the ₦1,200-per-litre mark in some depots, raising concerns among marketers, transport operators, and consumers about the potential impact on pump prices and supply stability.
Refinery Redirects Supply Away from Lagos
Sources familiar with the refinery's operations told PetroleumPriceNG that the suspension is a deliberate strategy to redirect locally refined petrol to areas where imported supplies are less readily available. The refinery is prioritising markets that lack significant import volumes, while Lagos, which has received substantial imported petrol, faces reduced coastal supply.
“The suspension of coastal sales to Lagos is still ongoing. It is aimed at redirecting products to locations where imported products are unavailable. Lagos has quite some imported petrol,” a source said.
The decision comes amid growing concerns at the refinery over the volume of imported petrol entering the Nigerian market and the difficulty of accurately forecasting domestic demand. According to data available to the refinery, imported PMS accounted for about 43 per cent of total petrol supplied into Nigeria in July. The refinery considers this volume significant enough to influence its production, inventory, and distribution decisions.
Import Licences and Demand Uncertainty
Dangote Refinery has also questioned the continued issuance of petroleum product import licences, despite its stated capacity to meet and exceed Nigeria's domestic petrol requirements. The refinery said uncertainty over the volume and timing of imported petrol makes it increasingly difficult to forecast how much locally refined product the domestic market will absorb.
To maintain uninterrupted supply, the refinery keeps substantial volumes in inventory and commits significant funds to storage, logistics, and working capital. However, maintaining large inventories becomes increasingly expensive when there is limited visibility over competing imports and their arrival schedules.
The refinery has explained that its increased petrol exports in recent months should not be interpreted as an inability to supply the Nigerian market. Rather, exports provide an outlet for products that cannot be efficiently absorbed domestically because of competing imported supplies. When refined products remain in storage for extended periods, the refinery incurs additional financing and logistics costs, making evacuation of excess volumes necessary to keep operations efficient.
Impact on Lagos Traders and the Broader Market
For Lagos-based fuel traders, the immediate concern is the continued suspension of coastal PMS sales from Dangote Refinery. The refinery is prioritising markets where imported petrol is less available, potentially putting additional pressure on Lagos marketers who depend on coastal supplies. The development also highlights the growing tension between locally refined petrol and imported products as Nigeria's downstream sector adjusts to the emergence of a major domestic refinery.
With petrol prices already crossing ₦1,200 per litre in some areas, the latest supply shift could become another important factor shaping pump prices across Lagos and other parts of the country.
In related news, Legit.ng reported that the Dangote Petroleum Refinery supplied 25.8 million litres of Premium Motor Spirit per day to the Nigerian domestic market in July 2026, down 21 per cent from the 32.5 million litres per day recorded in June, according to the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA). The July figure is the lowest monthly domestic supply the refinery has recorded in 2026.
