In a recent development that has sparked widespread discussion across Nigeria’s energy sector, the Dangote Petroleum Refinery, a flagship project of the Dangote Group, has publicly disclosed a contentious demand made by the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN). According to the refinery, DAPPMAN has requested an increase in the price of petrol and diesel by N75 per litre to align the cost of these products at their depots with the refinery’s gantry prices. This proposed adjustment, if implemented, could have significant implications for Nigerian consumers, potentially driving the pump price of Premium Motor Spirit (PMS) to as high as N950 per litre and Automotive Gas Oil (AGO), commonly known as diesel, to N1,090 per litre in certain parts of the country.
The refinery’s statement sheds light on the dynamics of fuel pricing and distribution in Nigeria, a nation heavily reliant on petroleum products for transportation, power generation, and industrial activities. The proposed price hike, driven by DAPPMAN’s request, has ignited debates about affordability, market dynamics, and the broader implications for Nigeria’s economy, which is already grappling with inflationary pressures and the lingering effects of fuel subsidy removal. This article delves into the details of the refinery’s position, the economic ramifications of DAPPMAN’s request, the refinery’s operational achievements, and its broader contributions to Nigeria’s economic landscape.
DAPPMAN’s Demand and Its Implications
The core of the controversy lies in DAPPMAN’s request for the Dangote Petroleum Refinery to adjust its pricing structure to accommodate additional logistics costs incurred by marketers. The refinery explained that while it offers petroleum products at its gantry price—a price point that excludes additional transportation or handling fees—DAPPMAN has insisted on taking delivery of these products through coastal logistics, a method that incurs an extra cost of N75 per litre. This additional cost, according to the refinery, stems from the logistics of transporting fuel from the refinery’s gantry to various depots across the country, a process that involves shipping and other operational expenses.
To put this into perspective, Nigeria’s daily consumption of PMS is estimated at 40 million litres, while AGO consumption stands at approximately 15 million litres. If the refinery were to absorb the additional N75 per litre cost for these volumes, the financial burden would amount to a staggering N1.505 trillion annually (approximately N1,505,625,000,000). The refinery has categorically rejected this demand, arguing that it would effectively require them to subsidize the marketers’ operations—a practice that echoes the controversial fuel subsidy regime that plagued Nigeria’s economy for decades.
In its statement, the refinery emphasized its refusal to pass on this cost to Nigerian consumers or absorb it on behalf of DAPPMAN. “We wish to make it clear that we have no intention of increasing our gantry price to accommodate such demands, nor are we willing to pay a subsidy of over N1.5 trillion, a practice that historically defrauded the Federal Government for many years,” the refinery stated. Instead, it invited DAPPMAN and other marketers to lift products directly from its gantry, thereby benefiting from a logistics-free pricing model that eliminates the additional costs associated with coastal delivery.
The refusal to comply with DAPPMAN’s request has not come without repercussions. The refinery alleges that its stance has triggered a wave of public criticism and attacks from certain quarters, particularly from those who stand to benefit from maintaining the status quo. This suggests a deeper tension within Nigeria’s petroleum marketing and distribution sector, where entrenched interests may be resistant to the disruptive changes introduced by the Dangote Refinery’s operations.
Operational Capacity and Market Dynamics
The Dangote Petroleum Refinery, located in the Lekki Free Zone in Lagos, is Africa’s largest single-train refinery, with a capacity to process 650,000 barrels of crude oil per day. Since commencing operations, the refinery has positioned itself as a game-changer in Nigeria’s energy sector, aiming to reduce the country’s dependence on imported petroleum products and establish Nigeria as a refining hub in Africa. The refinery’s statement highlights its robust operational capacity, noting that it maintains a closing stock of 500 million litres of refined products in its tanks each month. This stockpile is sufficient to meet domestic demand while also supporting exports, thereby contributing to Nigeria’s foreign exchange earnings.
Between June and September 2025, the refinery exported a total of 3,229,881 metric tonnes of PMS, AGO, and aviation fuel. In contrast, during the same period, marketers imported 3,687,828 metric tonnes of these products. The refinery described these imports as “dumping,” arguing that they are detrimental to Nigeria’s economy and the well-being of its citizens. The importation of refined products, despite the availability of domestically produced fuel from the Dangote Refinery, raises questions about the motivations of some marketers and their commitment to supporting local refining capacity.
The practice of importing fuel in large volumes undermines the economic benefits of domestic refining, such as job creation, reduced foreign exchange expenditure, and the stabilization of the Naira. By producing petroleum products locally, the Dangote Refinery eliminates the need for Nigeria to spend billions of dollars annually on fuel imports, a practice that has long strained the country’s foreign reserves. The refinery’s ability to meet domestic demand and support exports positions it as a critical player in Nigeria’s quest for energy self-sufficiency and economic diversification.
Economic Contributions and Support for Government Reforms
The Dangote Petroleum Refinery has aligned itself with the reform agenda of President Bola Ahmed Tinubu, whose administration has prioritized economic stabilization, energy security, and the removal of fuel subsidies. The refinery’s statement underscores its contributions to these goals, highlighting several strategic interventions that have had a tangible impact on Nigeria’s economy.
Stabilization of the Naira: By producing petroleum products locally, the refinery has reduced Nigeria’s reliance on imported fuel, thereby alleviating pressure on the country’s foreign exchange reserves. This has contributed to the stabilization of the Naira, which has faced significant volatility in recent years due to external economic pressures.
Cushioning the Effects of Subsidy Removal: The removal of fuel subsidies in 2023 was a contentious policy that led to sharp increases in fuel prices and living costs. The Dangote Refinery has played a role in mitigating these effects by ensuring a steady supply of petroleum products at competitive prices, thereby preventing shortages and price spikes that could further burden consumers.
Positioning Nigeria as a Refining Hub: The refinery’s large-scale operations have the potential to transform Nigeria into a net exporter of refined petroleum products, a significant shift from its historical role as a crude oil exporter and fuel importer. This aligns with the government’s vision of leveraging Nigeria’s vast oil resources to drive industrialization and economic growth.
Job Creation and Economic Multiplier Effects: The refinery’s operations have created thousands of direct and indirect jobs across various sectors, including engineering, logistics, and administration. Beyond job creation, the refinery’s activities stimulate economic growth by supporting ancillary industries such as transportation, manufacturing, and retail.
Boosting Foreign Exchange Earnings: The export of refined products has generated significant foreign exchange earnings for Nigeria, strengthening the country’s balance of payments and providing resources for critical imports and infrastructure development.
The refinery’s commitment to these objectives reflects its broader mission to contribute to Nigeria’s progress and well-being. It has expressed a willingness to collaborate with government agencies and other stakeholders to achieve these goals, while also emphasizing its readiness to hold institutions accountable when necessary.
Response to Criticism and Legal Stance
The Dangote Refinery’s refusal to comply with DAPPMAN’s demand for a price adjustment has evidently ruffled feathers within the petroleum marketing sector. The refinery’s statement suggests that the public criticisms and attacks it has faced in recent weeks are directly linked to its rejection of the subsidy-like arrangement proposed by DAPPMAN. These criticisms, according to the refinery, are an attempt to pressure it into absorbing the additional logistics costs, which would ultimately be passed on to Nigerian consumers in the form of higher fuel prices.
In response to these attacks, the refinery has taken a firm stance, reiterating its position as outlined in a statement published on Monday, September 15, 2025, in several national dailies and reputable online platforms. The refinery has made it clear that it will not be swayed by threats or ultimatums, including a reported seven-day ultimatum issued by certain parties. It has also signaled its readiness to defend its position through all legitimate means, including legal channels, should any aggrieved party choose to seek redress.
This resolute stance underscores the refinery’s commitment to transparency and accountability in its operations. By publicly disclosing DAPPMAN’s request and its potential impact on consumers, the refinery has sought to shed light on the dynamics of Nigeria’s petroleum sector and the challenges of transitioning to a subsidy-free market. The invitation to marketers to lift products directly from its gantry reflects a desire to promote efficiency and cost-effectiveness in the distribution process, ultimately benefiting consumers.
Broader Implications for Nigeria’s Energy Sector
The dispute between the Dangote Petroleum Refinery and DAPPMAN highlights broader challenges within Nigeria’s energy sector, particularly in the areas of pricing, distribution, and market competition. The refinery’s entry into the market has disrupted long-standing practices, including the reliance on imported fuel and the complex web of subsidies and logistics costs that have characterized Nigeria’s petroleum industry for decades. While this disruption has the potential to drive efficiency and reduce costs, it also threatens entrenched interests that benefit from the status quo.
The proposed N75 per litre price increase, if implemented, would have significant implications for Nigerian consumers, many of whom are already struggling with the high cost of living. Fuel prices play a critical role in determining the cost of transportation, goods, and services, and any increase could exacerbate inflationary pressures and further strain household budgets. By rejecting DAPPMAN’s demand, the Dangote Refinery has positioned itself as a defender of consumer interests, prioritizing affordability and accessibility over the demands of intermediaries.
At the same time, the refinery’s allegations of “dumping” by marketers raise important questions about the role of imports in Nigeria’s fuel market. The importation of large volumes of PMS, AGO, and aviation fuel, despite the availability of domestically produced alternatives, suggests a lack of alignment between marketers’ practices and the government’s goal of promoting local refining capacity. This issue may require regulatory intervention to ensure that Nigeria fully capitalizes on the benefits of the Dangote Refinery’s operations.
A Vision for National Development
The Dangote Petroleum Refinery’s statement concludes with a reaffirmation of its commitment to Nigeria’s progress and well-being. The refinery has expressed its openness to partnerships with “patriotic and responsible stakeholders” in pursuit of national development, signaling its willingness to work collaboratively to address the challenges facing Nigeria’s energy sector. This vision aligns with the broader goals of the Dangote Group, which has invested heavily in infrastructure projects aimed at driving industrialization and economic growth across Africa.
As Nigeria navigates the complexities of its energy transition, the Dangote Refinery stands as a beacon of innovation and resilience. Its ability to produce high-quality petroleum products at scale, coupled with its commitment to affordability and transparency, positions it as a critical player in shaping the future of Nigeria’s energy landscape. However, the success of this vision will depend on the cooperation of all stakeholders, including marketers, regulators, and consumers, as well as the government’s ability to create an enabling environment for local refining and distribution.
Conclusion
The Dangote Petroleum Refinery’s disclosure of DAPPMAN’s request for a N75 per litre price increase has brought to light the complexities and challenges of Nigeria’s petroleum sector. By rejecting this demand, the refinery has taken a stand against practices that could burden consumers and undermine the country’s economic stability. Its robust operational capacity, commitment to government reforms, and contributions to job creation and foreign exchange earnings underscore its role as a transformative force in Nigeria’s energy landscape.
As the refinery continues to navigate criticisms and pressures from various quarters, its focus on transparency, accountability, and consumer welfare sets a precedent for how large-scale industrial projects can drive national development. The invitation to marketers to lift products directly from its gantry, coupled with its rejection of subsidy-like arrangements, reflects a commitment to efficiency and fairness in the distribution process. Moving forward, the resolution of this dispute will likely shape the trajectory of Nigeria’s energy sector, with far-reaching implications for consumers, businesses, and the broader economy.
