Nigeria’s petrol market long depended almost entirely on imports, leaving prices exposed to foreign exchange volatility, freight costs, and global supply shocks.
After the subsidy removal in mid-2023, average pump prices jumped from ₦176 per litre in June 2022 to ₦546 per litre by June 2023, a 210% year-on-year increase. The rise continued to ₦672 per litre in December 2023. By late 2024, the national average retail price reached ₦1,189 per litre, representing nearly a 77% annual increase.
Wholesale prices mirrored the strain. Private depots quoted ex-depot levels largely within the ₦900 to ₦ 1,000 per litre range. Import reliance weighed heavily on the economy. Nigeria spent an estimated $14.6 billion on fuel imports between January and September 2023. Volatility, currency exposure, and rising costs intensified pressure for domestic refining capacity.
Dangote Enters with 650,000 bpd Capacity
Dangote’s 650,000 barrels per day refinery began operations in 2023 and started limited petrol sales to the Nigerian National Petroleum Company Limited (NNPCL) in 2024, marking the first large-scale domestic alternative to imports.
In September 2024, NNPCL confirmed it purchased petrol from Dangote at ₦898 per litre ex gantry, projecting a pump price of about ₦950.22 per litre. Dangote later began selling directly into the open market.
By December 2024, it cut its gantry price from ₦970 to ₦899.50 per litre. Additional reductions followed in early 2025, including a ₦65 cut from ₦890 to ₦825 per litre in late February.
At the time, NNPC retail outlets were still selling at ₦960 to ₦990 per litre in January 2025, placing Dangote below prevailing market levels. By December 2025, the company announced another major reduction, lowering its gantry price by 15.6% from ₦828 to ₦699 per litre.
Executives have also signalled that the refinery’s footprint will continue to grow. Dangote has said it plans to expand processing capacity from 650,000 barrels per day to 1.4 million bpd, a scale that would position the complex as the world’s largest single-site refinery, while creating jobs, upgrading fuel quality to Euro VI standards, and increasing power generation capacity. The company frames the expansion as both an economic and environmental upgrade.
From Gantry to Pump: How Prices Shifted
Distribution initially ran through partner marketers, including MRS Oil, Ardova, and Heyden.
Following the December 2024 cut, MRS sold at ₦860 per litre in Lagos, ₦870 in the Southwest, and up to ₦890 in the South South and Southeast.
By late December 2025, Dangote expanded to nationwide retail sales, announcing a ₦739 per litre pump price across more than 2,000 MRS stations. Competitive pressure followed. At one point, MRS sold at ₦710 per litre to align with Dangote’s pricing.
The shift was reinforced earlier through a controlled distribution model. In October, Dangote launched a monitored programme involving 20 major depot operators and marketers, including NNPCL Retail, Rainoil, Ardova, Pinnacle Oil and Gas, MRS Oil Nigeria, Conoil, and TotalEnergies Marketing Nigeria. Under the framework, the operators lifted and distributed 600 million litres of petrol, a structure designed to improve transparency and logistics compliance while expanding market reach.
Government data reflected the moderation. The National Bureau of Statistics (NBS) reported a 2.06% decline in retail prices in December 2024, to ₦1,189 per litre, after months of increases, partly attributing the shift to rising domestic supply.
Output, Consumption, and Import Trends
Dangote produces about 57 million litres of petrol per day, compared with Nigeria’s estimated daily consumption of 46 million litres. Marketers say domestic availability has improved and import reliance has eased.
Official figures support that view. Nigeria’s fuel import bill fell by 54% between early 2023 and late 2025. In November 2025, imports temporarily rose to 1.563 billion litres, up from 828 million litres in October, following regulatory changes. Dangote said the increase stemmed from licensing decisions rather than supply constraints.
The company has since widened access by opening sales to all qualified marketers, reducing minimum orders to 250,000 litres, and offering credit guarantees.
Challenges in 2025: Logistics, Labour, and Transport
The refinery’s growing influence also exposed friction across the supply chain.
Dangote Refinery and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) clashed publicly over pricing, exports, and domestic fuel supply. DAPPMAN alleged that Dangote was selling petrol cheaper to foreign buyers while charging higher rates to local marketers. Dangote rejected this, claiming depot operators were inflating logistics costs to undermine its competitive edge—citing proposals for coastal diesel shipments that could add about ₦75 per litre and an alleged push for an annual subsidy of ₦1.505 trillion. DAPPMAN denied these claims, attributing falling prices to a stronger naira and lower global crude costs, and threatened legal action.
Labour tensions followed. In September 2025, Dangote laid off more than 800 Nigerian workers, citing sabotage concerns. The Petroleum and Natural Gas Senior Staff Association of Nigeria launched a national strike, arguing the move targeted unionising staff. The dispute reportedly reduced Nigeria’s daily oil output by about 16%. Federal intervention led to worker reinstatement in October 2025 and formal recognition of union rights.
A separate standoff emerged over Dangote’s plan to deploy 4,000 CNG-powered trucks to cut transport costs. The National Union of Petroleum and Natural Gas Workers objected, saying the plan sidelined unionised drivers. After talks in September 2025, Dangote agreed to voluntary union membership, although negotiations later resumed over compliance.
A Structural Shift in the Market
Successive gantry reductions, culminating in a 15.6% single cut, have reshaped Nigeria’s pricing structure. Retail prices have moderated, imports have declined, and competitors have adjusted downward to remain competitive.
Analysts link much of the 54% fall in fuel import spending over two years to rising domestic refining. With output now meeting nearly 80% of national petrol demand, industry observers say Dangote’s growing scale, already significant and set to expand further, continues to stabilise supply, pressure prices, and reduce Nigeria’s reliance on imported fuel, despite regulatory, labour, and logistics challenges along the way.
