Dangote Price Hike Deepens Debate Over Nigeria’s Petrol Import Ban
Price Reversal Jolts Petroleum Market
NIGERIA’S downstream petroleum sector is facing renewed tension following a sharp increase in the depot price of petrol by the Dangote Petroleum Refinery and a controversial policy shift by regulators suspending petrol import licences.
The refinery raised its gantry price for Premium Motor Spirit (PMS) to ₦1,175 per litre, reversing an earlier reduction announced days earlier. The decision came as global crude prices surged amid geopolitical tensions in the Middle East.
According to a notice sent to petroleum marketers, the coastal supply price also rose from ₦1,378,548 per metric tonne to ₦1,512,648, representing an increase of about ₦134,100 per tonne, or roughly 9.7 per cent.
The refinery attributed the adjustment to “the current global geopolitical situation,” which has pushed up crude oil prices and raised refining costs.
Global Oil Surge Drives Refining Costs
Industry sources said the price revision reflects rising international oil prices, particularly the surge in Brent crude.
Benchmark crude rose from around $91 per barrel to about $100 per barrel, with Nigeria’s export grade, Bonny Light, also climbing above the $100 mark amid fears of supply disruptions in the Middle East.
The tensions involve geopolitical rivalries between the United States, Iran and Israel, which have increased the risk of instability around the strategically vital Strait of Hormuz, a shipping route that handles roughly 20 per cent of global oil flows.
Market analysts say such developments often introduce a “war premium” into crude prices, increasing costs across the global refining industry.
Temporary Disruptions in Depot Trading
The abrupt price reversal created immediate disruptions across Nigeria’s depot network.
Market sources indicated that some depot operators temporarily suspended trading while they waited for clarification on the new pricing structure.
Loading operations at the refinery were also briefly paused to reconcile stock allocations and align supply with the revised pricing framework.
Just days earlier, the refinery had lowered the ex-depot price to ₦1,075 per litre, triggering heavy buying activity from marketers seeking to take advantage of the reduction.
The sudden reversal left many traders scrambling to adjust contracts and pricing arrangements.
Government Import Ban Fuels Market Debate
The pricing controversy is unfolding alongside a more significant policy dispute: the suspension of petrol import licences by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
The regulator confirmed that no import licences had been issued in 2026, arguing that domestic production now supplies the bulk of Nigeria’s petrol demand.
Data from the agency indicates that local refineries supplied about 36.5 million litres per day in February, while imports accounted for roughly three million litres daily.
This means domestic refining represented approximately 92 per cent of total petrol supply, marking a dramatic shift from Nigeria’s long-standing dependence on imported fuel.
Marketers Divided Over Policy
The policy has divided industry stakeholders.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has publicly supported the suspension of imports.
Ahmed Fashola, a vice president of the association, argued that Nigeria must prioritise domestic refining capacity.
“If today we are able to achieve about 90 per cent of our supply locally, that is significant progress,” he said, urging the government to support local refiners.
Fashola also argued that the presence of the Dangote refinery had shielded Nigerians from potentially extreme fuel prices during the current global oil crisis.
“Without local refining, we might have seen petrol selling for ₦3,000 or ₦4,000 per litre,” he suggested.
Concerns Over Supply Gap
However, major fuel importers and large marketers have expressed scepticism about claims that domestic supply can fully meet national demand.
Several industry players pointed to consumption figures showing Nigeria uses around 56 million litres of petrol daily.
With the Dangote refinery producing about 36 million litres per day, they argue a supply gap remains.
“If consumption is over 50 million litres and production is about 36 million, there is clearly a shortfall,” one marketer said.
Critics warn that banning imports entirely could expose the market to supply disruptions and potential monopolistic pricing.
A Structural Shift in Nigeria’s Energy Market
Nigeria has historically relied on imported refined petroleum products despite being one of Africa’s largest crude producers.
However, the entry of the Dangote refinery—Africa’s largest refining facility with a capacity of 650,000 barrels per day—is transforming the sector.
The refinery began supplying petrol to the Nigerian market in September 2024, dramatically changing the supply landscape.
While regulators say local production could eventually eliminate the need for imports, industry experts caution that the transition will take time.
The Road Ahead for Nigeria’s Fuel Market
The current dispute highlights the growing influence of domestic refining in Nigeria’s fuel economy.
Yet it also raises fundamental questions about market structure, pricing power and supply security.
As global oil prices remain volatile and Nigeria attempts to shift from import dependence to local production, the debate over petrol imports—and the role of the Dangote refinery—appears far from settled.
