Key petroleum marketers in Nigeria have entered into agreements with major international gasoline suppliers to import fuel at significantly lower prices than currently offered at local retail stations. This move is set to introduce Premium Motor Spirit (PMS), commonly known as petrol, to the Nigerian market at about ₦700 per litre—a notable reduction from current pump prices.
Sources close to the deal revealed that the expected landing cost for the imported fuel will hover around ₦650 per litre. In response, petroleum retailer associations across the country are realigning their procurement strategies to incorporate these alternative sources, signaling a potential transformation in the downstream sector’s supply chain.
PETROAN Speaks on Market Challenges
Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), confirmed the marketers’ growing interest in international sourcing. He attributed this shift to the unpredictable pricing practices of local refineries, particularly the Dangote refinery, which he claims have destabilized their businesses.
“We are struggling with a market that lacks predictability,” Gillis-Harry said. “Marketers invest heavily in products, only for prices to drop before we can sell. This leads to consistent losses and increasing debt to financial institutions.”
He stressed that sustainable operations require a dual approach: consistent local refinery output and flexibility to import when necessary. “We want functioning refineries and open depot operations. But when local prices become unfavorable, we need the option to import,” he added.
Fears of Imminent Supply Disruptions
Gillis-Harry issued a warning about possible fuel scarcity if the current situation persists. He explained that many marketers are currently unable to make purchases, despite having allocations, due to cash flow constraints driven by losses from volatile prices.
“The system is pushing us out,” he said. “We are left with no choice but to turn to foreign partners who can deliver products at more stable and affordable prices.”
He also raised concerns over diesel availability, citing reports—later denied—of halted production at Aradel Holdings’ 11,000 barrels-per-day refinery in Ogbele, Rivers State. The refinery, which produces diesel, naphtha, and marine diesel oil, reportedly remains operational according to company sources. However, any disruption in its output could further strain diesel supply.
Dangote Defends Refinery Performance and Price Impact
Amid criticisms over pricing, Aliko Dangote, President of the Dangote Group, defended the role of his company’s massive 650,000 barrels-per-day refinery in stabilizing fuel prices and reducing Nigeria’s dependency on imported products.
Speaking during a visit by the ECOWAS Commission President, Dr. Omar Alieu Touray, Dangote reiterated that Africa’s economic progress is impeded by its reliance on imports. “This refinery proves that we can achieve global-scale industrial development on our own soil,” he said.
Dangote also countered claims that the refinery’s capacity falls short of domestic needs. “There were doubts that we could meet Nigeria’s demand, let alone supply the region. Now, stakeholders are witnessing the truth firsthand,” he added.
Regional Benefits of Local Refining
According to Dangote, the impact of local refining is already evident in sectors across the Nigerian economy. He noted that the price of diesel dropped from ₦1,700 to ₦1,100 when local production began, providing relief to industries, agriculture, and transportation.
For petrol, Dangote highlighted a stark contrast with regional pricing. “In neighboring countries, petrol costs about $1 per litre, which is around ₦1,600. Here, it’s selling for ₦815–₦820. Nigerians are paying nearly half of what others in West Africa pay,” he said.
He assured that further benefits are on the way, hinting at upcoming projects designed to maximize the refinery’s impact on national development.
A Beacon for African Industrial Growth
ECOWAS President Touray described the Dangote Refinery as a “beacon of hope” for Africa’s industrial future, applauding it as a model for what the private sector can achieve in driving regional transformation.
In the face of global volatility and domestic challenges, Nigeria’s downstream sector stands at a crossroads. Whether through international imports or improved local refining, stakeholders are urgently seeking sustainable solutions to ensure fuel affordability and supply security for millions of Nigerians.