A recent surge in Premium Motor Spirit (petrol) imports into Nigeria has intensified the ongoing dispute between oil marketers and the Dangote Petroleum Refinery, highlighting growing tensions within the country’s downstream oil sector.

This conflict deepened as independent oil marketers resumed large-scale petrol imports, with data revealing that more than 496.17 million litres were brought into the country over just nine days.

Two weeks ago, Alhaji Aliko Dangote, President of the Dangote Group, described his $20 billion refinery as still “fighting for survival.” His comments came amid persistent petrol imports and the reluctance of major marketers to buy in bulk from the refinery, despite its increased production capacity and improved output.

Dangote stressed at a recent event that the struggle against entrenched oil interests—which began even before the refinery started full operations—remains ongoing.

Recent developments appear to confirm the fears expressed by the business mogul, as petrol imports have seen a sharp increase in recent weeks. Data from the Tanker Position Report shows that between May 11 and 20, 2025, a total of 370,000 metric tonnes of petrol were discharged at various depots across the country. The report, which monitors the movement of oil tankers, indicates that these shipments arrived at different seaports during the period.

Based on the conversion rate of 1,341 litres per metric tonne, it means that marketers, relying on limited foreign exchange, imported approximately 496.17 million litres of petrol during the stated period.

At an average landing cost of ₦879.48 per litre, the total expenditure on PMS imports for that period is estimated at ₦436.37 billion. This figure adds to the ₦2.42 trillion already spent between March 1 and May 9, 2025, as well as the ₦4.51 trillion spent on petrol imports between October 2024 and February 2025.

According to industry insiders, the recent surge in fuel imports stems from mounting tensions between private fuel importers, depot operators, and the Dangote Petroleum Refinery. This friction, stakeholders say, is largely due to what they describe as unfavorable business conditions.

Sources disclosed that many marketers are intentionally choosing to import Premium Motor Spirit (PMS) rather than source it locally from the refinery. They attributed this decision to a mix of economic and operational hurdles, chief among them being the refinery’s pricing model, which is viewed as uncompetitive when compared to international import alternatives. Additional concerns include unfavorable commercial terms and challenges with gantry loading procedures.

This development aligns with a recent PUNCH report, which noted that a temporary reduction in output from the Dangote refinery—caused by unplanned maintenance—contributed to a rebound in West African fuel imports, with the region turning once again to European suppliers to meet demand.

Data from S&P Global Commodities at Sea supports this shift, showing a sharp rise in gasoline imports to Nigeria and Togo—from around 200,000 barrels per day (b/d) in January to over 300,000 b/d in March, and approximately 250,000 b/d in April—figures that are close to Nigeria’s estimated national demand of 300,000 b/d.

Industry sources also noted Togo’s growing role as a strategic entry point for Nigerian imports. Increasing volumes are being routed through the offshore Lome market, where large cargoes are transferred to smaller vessels for distribution. This trend, they explained, is driven by financial incentives—mainly to reduce tax liabilities and continue trading in U.S. dollars—as Nigeria pushes for more domestic transactions to be conducted in naira.

Favorable freight rates have significantly supported the steady flow of fuel into West Africa. On May 12, Platts assessed the Clean Long-Range UKC–West Africa freight rate at $22.68 per metric tonne, a notable drop from $28.25/mt recorded in the same period last year.

This trend is further corroborated by import documents revealing that 370,000 metric tonnes of petrol were brought into the country within a nine-day span. The consignments were delivered to key depots in Lagos, Warri, and Calabar—marking one of the highest weekly import volumes recorded this year, despite ongoing foreign exchange constraints.

Pinnacle Oil emerged as the largest receiver, with its depot—strategically located near the Dangote Refinery in Lekki—receiving 152,000 metric tonnes of petrol. This translates to approximately 208.83 million litres and accounts for nearly 49.6% of the total PMS imports recorded during the period.

In addition, seven independent marketers collectively imported over 167 million litres of petrol. Leading the group was AA Rano, which received 40.23 million litres via the AITEO/LESTE terminal. Sunbeth followed with 26.82 million litres discharged at the Menj Jetty. Other contributors included OBAT, Rainoil, Matrix, Prudent Energy, and Mainland (Calabar), each delivering 20.12 million litres—highlighting the expanding role of private operators in maintaining fuel supply amid market volatility.

Further reports indicate that three vessels carrying a combined 56,000 metric tonnes are expected to berth at the Lagos Apapa and Calabar ports today, Tuesday, May 20, 2025.

Stakeholders suggested that the spike in import volumes points to a shift by marketers away from local procurement in favor of direct imports—a move likely influenced by better profit margins at the depot level and intensifying supply pressures.

Depot prices for Premium Motor Spirit (PMS) have reportedly climbed in recent days, creating added complexity in distribution and pricing across the downstream oil market. Although specific figures remain inconsistent, marketers point to rising landing costs and logistical expenses as primary drivers of the recent increases.

Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), noted that while the downstream sector has been fully deregulated—allowing marketers to freely source fuel—the current spike in imports signals deeper structural issues within the industry.

Speaking in a telephone interview on Monday, Ukadike suggested that the abnormal surge in fuel imports may reflect underlying problems with the Dangote Petroleum Refinery’s pricing structure. He explained that the downstream market has effectively turned into a survival zone, where marketers must choose between importing fuel or buying from the local refinery based on profitability.

“As I’ve always said, the market is fully liberalised with no regulation whatsoever,” Ukadike stated. “It has become a case of survival of the fittest and a price war. If Dangote's pricing were truly competitive, I doubt importers would still be bringing in fuel. These are businessmen aiming to make a profit. The refinery claims it has enough petroleum products to meet national demand, but the NMDPRA (Nigerian Midstream and Downstream Petroleum Regulatory Authority) has acknowledged a shortfall in supply.”

He added, “When the sector regulator admits a gap, that reflects the actual situation on the ground. We didn't witness this scale of imports in previous months, so this new wave likely suggests something is off with Dangote’s pricing template. Marketers are importing, selling, and not incurring losses—so clearly, something isn't adding up. It raises questions about whether Nigerians are getting the real cost from the refinery, and that ambiguity needs to be addressed.”

“For us as independent marketers, our own concern is to ensure the availability of products. We don’t want the interruption in the supply of petroleum products, whether locally or internationally. So whatever, we would be able to contribute to ensure the supply and bring down the petroleum. It is a win-win situation. Pinnacle has its own customer base, tricks and tactics to the distribution of products, as well as Dangote. These companies are big players in the downstream and gas industry.

“I also know that sometimes the Nigerian National Petroleum Company Limited uses Pinnacle and Matrix to bring in products. These companies have outlets too. People are free to import products for their own outlets, and they are selling them. Dangote is using MRS too. So, it’s a free market.”

The Petroleum Products Retail Outlets Owners Association of Nigeria President, Billy Gillis-Harry, said that more than 70 per cent of the association’s over 7,000 retail outlets have shut down due to unsustainable operating conditions and lack of pricing stability in the downstream oil sector.

“Over 70 per cent of our retail outlets are closed and out of business today,” Gillis-Harry disclosed. “And the reason is that we struggle to take loans from the banks, purchase products, and before we even get to our filling stations, prices have either gone up or been slashed without any justifiable reason.”

He said the current volatility in fuel pricing has left marketers exposed to losses and made it nearly impossible to plan or remain competitive, forcing many to seek alternative sources of supply that offer stability and relief.

“That situation has forced us to source products from those who can give us a soft landing, so we can recover and compete,” he explained. “If someone knows that fuel is available and affordable, there’s no need for Nigerians to queue endlessly. But if there’s no liquidity to stock or restock, it naturally leads to scarcity and price hikes.”

Gillis-Harry warned that Nigeria may be sliding into a risky experiment akin to the strategy once adopted by Indian oil magnate Mukesh Ambani, who reportedly sustained massive losses to gain long-term market dominance.

“Right now, the current scenario reminds me of Mukesh Ambani. He had a vision of losing $25bn in 180 days and gaining three times that in 30 days—and he achieved it. We fear that this might be the same kind of market experiment playing out in Nigeria,” he said.

The President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) praised the vision and promise of the Dangote refinery but emphasized that its success should not jeopardize the survival of smaller players in the market, many of whom are already facing significant challenges.

“I am happy about the Dangote Refinery. But if that happiness results in me being thrown out of business, how do I foot my bills? What then is the happiness about?” he queried.

According to Gillis-Harry, PETROAN members are left with no choice but to patronise fuel sources that offer predictable pricing and reduced risk.

“We will gladly patronise any source of products that would not expose us to the kind of fluctuation that is currently wrecking our businesses,” he added.

Oil and gas expert Olatide Jeremiah confirmed that the current situation has intensified business tensions between fuel importers, depot operators, and the Dangote refinery. He noted that the refinery’s large-scale gantry loading capacity has significantly eroded the market share of traditional importers, fueling heightened competition and deepening the ongoing conflict within the industry.

“The gantry loading capacity of over 2,500 trucks daily at Dangote Refinery has diminished 50 per cent of the sales made by fuel importers,” he said. “Most of these importers now sell through their retail outlets just to stay afloat.”

“I can categorically tell you that there is a business conflict, and that’s why private depot owners and importers would rather continue importing than patronising the Dangote Refinery,” Jeremiah stated. “Unfair pricing, unfavourable business terms, and gantry loading constraints are all pushing many players back into importation. It’s a game of survival now.”

He explained that many long-standing importers and depot operators, who were instrumental in the sector’s liberalisation, are using their expertise and global connections to achieve lower landing costs than Dangote, thereby gaining a competitive advantage in the market.

Renowned energy economist Prof. Wumi Iledare also weighed in, expressing concerns about the structural inefficiencies within Nigeria’s downstream petroleum sector. He described the industry as “largely anticompetitive,” dominated by a small group of powerful players engaged in a fierce battle for market share and profit maximization.