Market battles at the gantry: How competition, not refining cost, sets petrol prices (1)
August 12, 2026 12:55 am
FILE: President of Dangote Group, Alhaji Aliko Dangote
In this report, DAMILOLA AINA examines Nigeria’s evolving petrol pricing system and finds that competition, market structure and global market forces — not production capacity alone — now largely determine fuel prices. Drawing on an extensive analysis of gantry prices and import landing costs, the investigation shows that petrol prices increasingly respond to international crude oil movements, exchange rate fluctuations and import parity rather than the cost of refining fuel locally
There is a quiet but intense contest shaping the price of Premium Motor Spirit (petrol) in Nigeria. It is not always visible at filling stations, but it plays out daily at depots and gantries, where refined fuel enters the distribution chain that powers transportation, commerce and the wider economy.
Prices rise and fall—sometimes sharply, sometimes subtly—in response to forces that often extend far beyond Nigeria’s borders. Petrol pricing has become more than a market mechanism; it reflects the country’s deep integration into global energy markets. The evidence now points to a fundamental shift: in today’s downstream market, pricing power matters more than production power.
For years, Nigerians believed the solution to high petrol prices was straightforward—refine more crude locally, reduce imports and prices would fall. The commissioning of the Dangote Petroleum Refinery strengthened that expectation. Built at a cost of about $20 billion, the refinery was designed to process 650,000 barrels of crude per day. It is now reportedly refining about 700,000 barrels daily, with plans to expand capacity to about 1.4 million barrels per day within three years.
For decades, Nigeria exported crude oil while importing refined petroleum products, a contradiction that depleted foreign exchange reserves and sustained a powerful network of fuel importers. The Dangote refinery promised to reverse that model by supplying refined products locally, reducing import dependence and ultimately lowering fuel prices. While it has significantly expanded domestic supply, the promise of consistently cheaper petrol has yet to materialise.
From the moment the refinery began selling petrol in September 2024, it became clear that entering the market would not automatically translate into pricing dominance. The downstream sector was already shaped by importers, depot owners and marketers operating within a framework driven by international crude prices, exchange-rate movements and years of subsidy-induced distortions. Rather than disappearing with the arrival of local refining, those forces adapted and intensified.
The refinery’s founder, Aliko Dangote, has repeatedly argued that entrenched interests have resisted the emergence of domestic refining. Speaking in Lagos on September 15, 2025, while launching compressed natural gas-powered trucks for direct fuel distribution, he described the refinery’s first year of petrol production as a difficult battle against operators who benefited from the old import-dependent system.
“The past year has been a very rough journey, I must confess. It wasn’t easy because we came in to change the narratives. We came in to change the system of how things have been done in the downstream.
“We have people who are used to rent collection. We have people who believe we have taken food from their tables,” Dangote said.
He also accused international traders and local marketers of working together to frustrate domestic refining by sustaining fuel imports.
Beyond public criticism, Dangote sought policy support, urging President Bola Tinubu to extend the Federal Government’s ‘Nigeria First’ policy to refined petroleum products and restrict fuel imports. Legal action was also initiated in an attempt to challenge what he described as unfair import practices.
Regulators, however, maintained that imports remained necessary to safeguard energy security, arguing that no single refinery could consistently satisfy Nigeria’s petrol demand.
Caught between these competing positions, Nigerians continued to expect that local refining would make fuel both cheaper and more readily available. Yet official data tells a different story. According to the National Bureau of Statistics, the average retail price of petrol rose by N565.54 per litre, or 54.88 per cent, from N1,030.46 in September 2024 to N1,596.00 in May 2026.
To understand why, The PUNCH compiled and analysed gantry prices announced by Dangote Refinery alongside imported petrol landing costs published in the Major Energies Marketers Association of Nigeria’s Competency Centre Energy Bulletin between September 15, 2024 and July 13, 2026.
After excluding periods with sales suspensions, undeclared prices and incomplete records, 175 directly comparable observations remained out of 189 total entries.
The findings reveal a market far more competitive than widely assumed.
Using spot landing costs, Dangote’s gantry price exceeded imported petrol in 92 observations, or 52.57 per cent of the sample, while imported petrol was cheaper in 83 observations, representing 47.43 per cent.
The results were similarly balanced when measured against the 30-day average landing cost. Dangote’s gantry price was higher in 93 observations (53.14 per cent), while imported petrol was more expensive in 82 observations (46.86 per cent).
Rather than showing one supplier consistently undercutting the other, the data points to a market in which pricing leadership shifts constantly as conditions change.
A senior industry analyst said the comparison becomes even more complex when the full cost structure is considered.
According to the analyst, Dangote’s ex-depot price excludes several logistics and statutory charges—including jetty fees, trucking costs and regulatory levies—that importers must pay before fuel reaches the market.
“Import appears cheaper when you look at the full pricing structure. Dangote’s gantry price does not include into-tank costs such as jetty fees, trucking charges and statutory levies from agencies like the Nigerian Ports Authority and the Nigerian Maritime Administration and Safety Agency,” the analyst said.
By contrast, imported petrol’s landing cost already includes those expenses.
“In contrast, the landing cost of imported fuel already includes all these expenses. So when you compare both on a like-for-like basis, the picture changes.”
The analyst argued that incorporating those additional costs into the refinery’s ex-depot price could significantly alter perceptions of its competitiveness.
“If you add all those fees to the gantry price, I am sure the story wouldn’t be the same.”
Asked whether imports are generally cheaper, the analyst replied: “In some cases, yes. In most cases, in fact.”
The findings underscore an important shift in Nigeria’s downstream petroleum market. Local refining has undoubtedly strengthened domestic supply and improved energy security, but it has not consistently delivered lower prices.
Instead, gantry prices increasingly respond to international crude prices, exchange-rate movements, shipping and logistics costs, import parity and the pricing decisions of competing suppliers. Refining costs remain important for profitability, but they are no longer the principal determinant of market prices.
Analysts describe this as the emergence of a “market-clearing price”—a price determined less by the cost of refining petrol locally than by the cost at which competing supplies, particularly imports, can enter the Nigerian market. When imported petrol lands more cheaply because of favourable crude prices or exchange-rate movements, domestic refiners are forced to match or approach those prices regardless of their production costs. Conversely, when imports become more expensive, local refiners gain greater room to increase prices even if their underlying costs have changed little.
The implication is significant. Expanding domestic refining capacity alone cannot guarantee cheaper petrol. As long as imports remain a credible alternative, local prices will continue to be shaped primarily by competition rather than production costs.
Overall, the analysis presents a more nuanced picture than many expected. Dangote Refinery has frequently priced below the longer-term average landing cost of imported petrol, demonstrating sustained competitiveness over time. However, its advantage has not been sufficient to eliminate imports from the market. Instead, local refining and imported supply continue to influence petrol prices, creating a dynamic market in which neither side exercises complete pricing power.
That competition has also shaped market behaviour. The PUNCH observed that the refinery has occasionally suspended petrol sales when imported products became cheaper than its gantry price, highlighting the commercial pressures created by import parity and the increasingly competitive nature of Nigeria’s downstream petroleum market.
The pricing journey began on September 15, 2024, when Dangote Refinery entered the market with a gantry price of N765 per litre. Within days, between September 23 and 27, the price rose sharply to N997, slightly above the imported landing cost of N981.08. This early movement suggested that the refinery was still navigating cost structures and market positioning.
By the end of September and into early October, Dangote’s price hovered around N993, while imported petrol landed slightly higher at N1,009.93, indicating a brief window where local refining appeared more competitive.
However, this advantage did not last consistently. In early October, Dangote’s price stood at N988, compared to imported petrol at N975.89, again placing imports at a marginal advantage. By mid-October, the refinery increased its price significantly to N1,103, marking one of its highest early adjustments. This period reflected the volatility of a market still finding its balance.
As October progressed into November, the pricing gap continued to shift. Dangote’s gantry price ranged between N1,060 and N1,040, while imported petrol landing costs remained below N1,000 in many instances. By mid-November, imports had dropped as low as N938.09, undercutting the refinery’s N1,040 price. This trend persisted into late November, though Dangote began to respond with gradual reductions, bringing its price down to N970 by late November.
December 2024 marked a more decisive adjustment. While Dangote initially held at N970, imported petrol prices fell further, reaching N899.58 by mid-December. In response, the refinery cut its price to N899.50 on December 19, aligning closely with import costs. By December 20, imports had dropped even lower to N887.51, showing that competition remained intense even after the refinery’s reduction.
The dynamics continued into 2025 with Dangote opening the year at N899.50 per litre. By January 19, the price had increased to N950, despite imported petrol landing at lower levels in several instances. Through late January, imports ranged between N922 and N943, while Dangote maintained its N950 price, indicating a persistent premium.
In February, Dangote reduced its price to N890, signalling a more aggressive response to competition. However, imported petrol remained competitive, with landing costs frequently below the refinery’s price. This trend intensified in March, when Dangote cut its price further to N825 and later to N815. During the same period, imported petrol dropped as low as N774, maintaining a price advantage.
A critical moment occurred on March 19, 2025, when Dangote halted sales of refined products in naira, insisting that its allocations under the crude-for-naira programme were inadequate, citing the depletion of its Naira-denominated crude oil allocation.
The decision then sparked concerns over the dollarisation of fuel sales in Nigeria, escalating prices at the pump to almost N1,000 per litre. This development highlighted the refinery’s role as a stabilising force. Even if it did not always offer the lowest price, its presence exerted downward pressure on the market.
When Dangote resumed sales in April at N880, the market began to stabilise again. Over the following weeks, the refinery implemented a series of reductions, bringing its price down to N835. During this period, imported petrol fluctuated between N840 and N880, showing a closely contested market.
By mid-2025, the competition had evolved into a full-scale price war. Dangote’s prices moved between N825 and N880, while imported petrol remained highly volatile. On June 30, the refinery reduced its price to N840 explicitly due to competitive pressure. This period demonstrated how both sides were actively responding to each other’s pricing strategies.
In July, Dangote pushed prices further down to N820, undercutting imports in several instances. This marked one of the few periods where the refinery consistently held a price advantage. However, this position required sustained reductions, indicating the cost of maintaining competitiveness.
The announcement of 4,000 CNG trucks to boost direct supply in August 2025 represented a strategic shift. Rather than focusing solely on pricing, Dangote began investing in distribution efficiency, aiming to reduce logistics costs and strengthen its market position. Prices remained relatively stable around N820 during this period.
However, the market remained sensitive to disruptions. In October 2025, another sales suspension by Dangote allowed imports to regain dominance. When the refinery returned with a price of N877, imported petrol was still available at lower costs, reinforcing the persistent competitiveness of imports.
The final months of 2025 saw one of the most aggressive pricing strategies from Dangote. By December, the refinery reduced its price to N699, significantly undercutting imported petrol, which ranged between N733 and N820. This marked a decisive moment where local refining demonstrated clear price leadership.
Alhaji Dangote said he reduced the price because of information that some marketers were planning to keep pump prices high, preferring to incur heavy losses across the value chain.
Findings by The PUNCH show that petrol importers during this period lost as much as N102.48bn monthly after the Dangote refinery reduced its gantry price from N828 per litre to N699.
At the same time, the refinery was projected to lose about N91bn in a month as a direct consequence of the price cut, underscoring the intensity of the competition currently reshaping Nigeria’s downstream oil market.
Yet, this advantage proved temporary. Entering 2026, Dangote gradually increased prices from N699 to N774 and then to N799. Imported petrol remained competitive throughout this period. By March 2026, prices surged dramatically, with Dangote reaching N1,275, while imported petrol landed at slightly lower levels in several instances.
By April 2026, Dangote maintained prices around N1,200, while imported petrol hovered just below or within a similar range. This convergence highlighted the continued interplay between local and global pricing forces. This trend continued into May, June and July.
Furthermore, day-by-day pricing trajectory of petrol at the gantry revealed a market that has steadily evolved from expectation to intense competition. The percentage gaps highlight how narrow, and sometimes wide, the competition has been.
On September 15, 2024, Dangote entered the market at N765 per litre, with no import comparison available. However, by September 23–27, Dangote’s price rose to N997, which was N15.92 higher than the import landing cost of N981.08, representing a 1.62 per cent premium over imports. This early margin showed Dangote entering slightly above market parity.
Between September 30 and October 4, Dangote sold at N993, while imports were N1,009.93, meaning Dangote was N16.93 cheaper or 1.68 per cent lower than imported petrol, one of the first signs of competitiveness.
From October 7–11, Dangote priced at N988, compared to imports at N975.89, making Dangote N12.11 higher, a 1.24 per cent premium. By October 21–25, Dangote at N1,060 was N75.90 higher than the spot import price of N984.10, reflecting a 7.71 per cent premium, and N88.56 higher than the 30-day average of N971.44, a 9.11 per cent premium, one of the widest early gaps.
Between October 28 and November 1, Dangote at N1,040 was N54.41 higher than spot imports (5.52 per cent premium) and N60.28 higher than the 30-day average (6.15 per cent premium). By November 3, the gap narrowed, with Dangote at N990 just N16.67 higher than imports (1.71 per cent premium).
On November 15, Dangote widened the gap again, selling at N1,040, which was N101.91 higher than the import spot price (10.87 per cent premium) and N64.07 higher than the 30-day average (6.57 per cent premium). By November 22, Dangote reduced to N985, only N8.93 higher than imports (0.91 per cent premium) and N13.86 higher than the average (1.43 per cent premium).
A key shift occurred on November 24, when Dangote cut to N970, making it N13.68 cheaper than spot imports (1.39 per cent discount) but still N4.74 higher than the 30-day average (0.49 per cent premium).
By December 3, Dangote at N970 was N25.91 higher than imports (2.75 per cent premium) and N9.37 higher than the average (0.98 per cent premium). On December 17, the gap widened sharply as imports fell to N899.58, leaving Dangote N70.42 higher, a 7.83 per cent premium, and N29.41 higher than the average (3.13 per cent premium).
A turning point came on December 19, when Dangote reduced to N899.50, becoming N5.75 cheaper than the import spot price (0.64 per cent discount ) and N36.18 cheaper than the 30-day average (3.87 per cent discount). However, by December 20, imports dropped further to N887.51, placing Dangote N11.99 higher (1.35 per cent premium) but still N33.62 cheaper than the average (3.60 per cent discount).
Entering 2025, Dangote increased to N950 by January 19. On January 21, this was N11 higher than imports (1.17 per cent premium) and N49.26 higher than the 30-day average (5.47 per cent premium). Similar margins persisted through January 22–24, with Dangote maintaining a 1–3 per cent premium over spot prices and up to 5 per cent above average costs.
By February 1, Dangote reduced to N890, which was N20.14 cheaper than imports (2.21 per cent discount) and N49.03 cheaper than the average (5.22 per cent discount), marking a return to competitive pricing.
This trend continued through February 4–21, where Dangote maintained a 3–8 per cent discount relative to 30-day averages.
On March 10, Dangote at N825 was N50.28 higher than the import spot price (6.49 per cent premium) but N39.92 cheaper than the 30-day average (4.62 per cent discount).
Similar patterns held through March 11–13, with Dangote maintaining a 3–5 per cent discount on averaged costs despite being higher than spot prices.
By March 14, Dangote reduced to N815, almost matching the spot price (N817.82), a marginal 0.34 per cent discount, while still being N39.15 cheaper than the average (4.58 per cent discount).
On March 17, imports dropped further, making Dangote N17.34 higher (2.17 per cent premium), though still N36.76 cheaper than the average (4.31 per cent discount).
Following the March 19 sales suspension due to the inadequacies of the naira for crude policy, the market reacted sharply.
By March 24, imports rose to N885.83, reflecting a spike, with no Dangote benchmark available, demonstrating the refinery’s absence.
When Dangote resumed on April 3 at N880, it was N14.68 higher than spot imports (1.70 per cent premium) but N32.58 higher than the average (3.84 per cent premium). By April 4, the gap widened, with Dangote N38.44 higher than spot (4.57 per cent premium) and N33.66 higher than the average (3.98 per cent premium).
By April 15, Dangote reduced to N835, becoming N34.29 cheaper than imports (3.94 per cent discount) and N11.71 cheaper than the average (1.38 per cent discount).
This competitive stance continued through late April and May, where Dangote maintained consistent discounts of 1–6 per cent relative to the 30-day average.
For example, on May 13, Dangote at N825 was N67.85 cheaper than imports (7.60 per cent discount) and N64.39 cheaper than the average (7.24 per cent discount), one of the strongest competitive positions observed.
Through June 2025, Dangote maintained N825–N835, consistently staying 6–8 per cent below the 30-day average, even as spot prices fluctuated.
However, by June 20, when Dangote increased to N880, it was still N66.90 cheaper than spot imports (7.07 per cent discount) and N23.44 cheaper than the average (2.59 per cent discount).
By June 27, imports dropped sharply to N846.62, making Dangote N33.38 higher (3.94 per cent premium), prompting a reduction to N840 on June 30, nearly matching imports with just a N0.51 difference (0.06 per cent parity gap).
In July, Dangote reduced further to N820, staying N77–N80 cheaper than the 30-day average (8–9 per cent discount). This advantage narrowed by July 28, where the discount dropped to about 2.4 per cent.
By August and September 2025, Dangote maintained N820, generally staying 2–5 per cent below average import costs, though occasionally matching or slightly exceeding spot prices.
In early 2026, the trend reversed. On March 2, Dangote at N874 was N64.62 higher than spot imports (7.99 per cent premium) and N140.29 higher than the average (19.12 per cent premium), marking a significant shift.
By March 9, at N1,075, Dangote was N45 higher than spot imports (4.37 per cent premium) but a massive N326.54 higher than the average (43.66 per cent premium), highlighting the widening gap.
This escalation continued through March 16–21, where Dangote peaked at N1,275, remaining consistently above import benchmarks. By March 24, Dangote was N135.76 higher than spot imports (11.92 per cent premium) and N379.97 higher than the average (42.46 per cent premium).
By April 23, 2026, Dangote at N1,200 was only N4.06 higher than spot imports (0.34 per cent premium), but still N78.28 higher than the 30-day average (6.98 per cent premium).
Unlike the sharp price escalation witnessed between March and April 2026, the market entered a period of rapid downward price correction, with Dangote Refinery repeatedly cutting its ex-depot price in response to easing international prices and sustained competitive pressure from imported products.
Immediately after April 23, the refinery maintained its ex-depot price at N1,200 per litre on April 24, while imported petrol landed at N1,195.94 on the spot market and N1,121.72 on the 30-day average. This meant Dangote sold at just N4.06 (0.34 per cent) above the spot import cost but N78.28 (6.98 per cent) above the longer-term average, suggesting that although near-market parity had been achieved in the short term, imports still enjoyed a structural cost advantage when viewed over a longer pricing window.
By April 27, the balance shifted slightly in favour of local refining. Dangote retained its N1,200 price while the spot landing cost climbed to N1,236.44, making the refinery N36.44 cheaper, or about 2.95 per cent below imported petrol. However, compared with the 30-day average of N1,133.89, the refinery remained N66.11 higher, representing a 5.83 per cent premium.
The pricing landscape changed again on April 29, when Dangote increased its gantry price to N1,275, while the spot import cost rose further to N1,325.41. This temporarily restored the refinery’s competitive edge, placing it N50.41 (3.80 per cent) below the immediate import cost.
Nevertheless, the 30-day average landing cost remained substantially lower at N1,147.39, leaving Dangote’s price N127.61 (11.12 per cent) above the medium-term benchmark.
That pattern persisted through May 2026. Between May 5 and May 21, Dangote held its ex-depot price at N1,275 per litre, while spot import prices fluctuated between N1,233.87 and N1,362.55. During periods when international prices surged above N1,300, such as May 12, May 13, May 18 and May 19, the refinery enjoyed a competitive advantage of between 2 per cent and 6 per cent relative to spot imports. However, when benchmarked against the 30-day average landing costs, which ranged from N1,165.87 to N1,230.34, Dangote consistently sold at premiums of roughly 3.6 per cent to almost 9.4 per cent, indicating that its competitiveness depended largely on short-term market conditions rather than sustained cost leadership.
A more decisive turning point emerged in June 2026 as global crude prices softened. On June 2, Dangote reduced its gantry price from N1,275 to N1,250 per litre, the first major reduction since the March-April price spike. Yet, imported petrol landed at only N1,118, leaving Dangote N132 higher, or 11.8 per cent more expensive than spot imports. Interestingly, the refinery had almost reached parity with the 30-day average landing cost of N1,248.17, exceeding it by just N1.83, or 0.15 per cent.
The same pattern continued through June 4, June 9 and June 10, when Dangote maintained N1,250 despite spot landing costs falling to between N1,080.56 and N1,101.93. This left the refinery carrying premiums of between 13 per cent and nearly 16 per cent over immediate imports. However, against the rolling 30-day average, the gap narrowed significantly to less than 2 per cent, showing that Dangote was increasingly using the longer-term import trend, rather than daily fluctuations, as its pricing reference.
Faced with sustained weakness in international prices, Dangote implemented another round of reductions. On June 19, the refinery cut its ex-depot price to N1,175, and maintained that level until June 24. Spot landing costs during that period fell further to between N983.92 and N1,019.26, leaving Dangote between 15 per cent and 19 per cent more expensive than immediate imports.
Yet, compared with the 30-day average landing cost, the premium narrowed dramatically to between 0.35 per cent and about 3 per cent, reinforcing the growing convergence between local prices and the broader import cost trend.
The competitive pressure intensified further on June 25, when Dangote reduced its gantry price again to N1,125 per litre. This price remained unchanged through June 30 and July 1. Although the refinery still traded above the prevailing spot landing costs by roughly 6 per cent to 10 per cent, it had effectively reached parity with the 30-day average. On June 25, for instance, Dangote was lower than the average landing cost by N3.63, representing a 0.32 per cent discount. By June 29, it stood N19.44 (1.76 per cent) above the average, while on June 30 the premium had narrowed to 2.77 per cent.
Another strategic adjustment occurred on July 2, when Dangote announced a further reduction to N1,075 per litre. At that level, the refinery sold N27.13 (2.59 per cent) above the spot import cost of N1,047.87, but was virtually at parity with the 30-day average of N1,078.68, representing a marginal 0.34 per cent discount.
This marked one of the closest alignments between domestic refining prices and imported petrol costs since the refinery entered the PMS market.
By July 9, however, international prices rebounded. Spot import costs climbed to N1,135.73, making Dangote’s N1,075 price N60.73 cheaper, or approximately 5.35 per cent below imported petrol. Against the 30-day average of N1,064.42, the refinery was only N10.58 (0.99 per cent) higher, illustrating how quickly its competitive position improved whenever international prices strengthened.
The latest data as of July 13, 2026, further underscores the refinery’s evolving pricing strategy and altered the competitive landscape.
The Refinery has now switched from naira to dollar-denominated ex-depot pricing, announcing a price of $0.779 per litre to marketers, reflecting the increasing integration of domestic pricing with international market benchmarks. On the same day, imported petrol landed at N1,138.33 on the spot market and N1,064.36 on the 30-day average.
However, the decision has been strongly rejected by petroleum marketers and several energy experts, who argue that domestic petrol sales should remain naira-denominated in line with the objectives of the Federal Government’s naira-for-crude policy.
Based on the prevailing exchange rate, the refinery’s dollar-denominated pricing placed it broadly within the same competitive range as imported products, suggesting a deliberate effort to insulate pricing from exchange rate volatility while remaining responsive to international market movements.
Taken together, the new dataset significantly strengthens the central finding of this investigation. Rather than signalling the emergence of a dominant domestic supplier capable of independently setting prices, the April-to-July 2026 data shows that Dangote Refinery has become increasingly responsive to import parity.
The refinery repeatedly adjusted its prices downward, from N1,275 in May to N1,250, then N1,175, N1,125, and finally N1,075, before migrating to a dollar-based pricing framework, in apparent response to maximise profit.
The dataset therefore reinforces the broader conclusion reached from the earlier analysis.
Nigeria’s downstream market has evolved into one where competition, not refining cost alone, remains the principal determinant of petrol prices.
Even as Dangote Refinery has become the country’s dominant supplier, controlling the overwhelming share of domestic petrol supply in recent months, its pricing behaviour continues to mirror global crude movements, exchange rate dynamics and import parity.
This suggests that domestic refining, while significantly strengthening energy security and reducing dependence on imports, has not eliminated the market discipline imposed by international competition.
Instead, the evidence points to a mature pricing environment in which local refiners and importers continuously adjust to one another, with consumers ultimately benefiting most when rivalry intensifies.
Commenting, energy experts, in separate interviews, attributed the persistent volatility in petrol prices to a mix of global crude market pressures, regulatory gaps, and limited competition within Nigeria’s downstream sector.
The Principal Partner at The Energy Consulting Practice, Kelvin Emmanuel, explained that the current ex-gantry pricing structure is heavily influenced by external crude market dynamics and product quality concerns tied to imports.
“The issue of ex-gantry price and how that builds into recommended retail price when you include taxes, logistics, and retail margins can be traced directly to the Brent spread and certificate of quality of product imported,” he said.
Emmanuel noted that the widening spread in Brent crude has significantly inflated the cost of spot cargoes, stressing that supply disruptions in the Middle East have worsened the situation.
“Brent spread because the shortfall of about 13 million barrels in the Middle East has made the cost of spot cargoes really expensive, with premiums as high as $40 per barrel,” he added.
He further raised concerns over the quality of imported petroleum products, stating that many fail to meet Nigeria’s regulatory standards.
“Certificate of quality because in most instances, the sulphur level of most of the imported feedstock brought into Nigeria does not comply with Section 317(11) of the Petroleum Industry Act,” Emmanuel said.
According to him, regulatory shortcomings have compounded the problem, particularly the absence of clear operational guidelines for market players.
“Number two has to do with the failure of the regulator to provide regulatory guidelines for how operators should be governed,” he stated.
He also pointed to Nigeria’s lack of a strategic petroleum reserve as a critical vulnerability in cushioning price shocks.
“Number one deals with the fact that Nigeria, as a country, lacks crude oil feedstock in strategic petroleum reserve inventory to absorb the shock at DCSO level, in order to insulate the market from the shocks of Brent spread, which might take months to adjust,” he added.
In a separate interview, the Chief Executive Officer of petroleumprice.ng, Jeremiah Olatide, said market competition and pricing strategies among suppliers have overtaken traditional cost metrics such as landing cost in determining fuel prices.
“Yes, in the last one year, price wars and market share dominance have influenced gantry prices largely. Landing cost and its analysis are now inconsequential in the scheme of petroleum product pricing in Nigeria,” he said.
Olatide explained that the rise in domestic refining has shifted pricing considerations toward production efficiency, while questioning the transparency of current pricing models.
“As domestic supply surges, refining costs now play a major role in pricing. As such, there must be transparency in what makes up a litre at the gantry, so as to ascertain the efficiency of the naira-for-crude policy,” he said.
He expressed concern that despite increased availability of petroleum products, affordability remains a major challenge for Nigerians.
“For me, there is no visible difference between fuel prices during the importation era and now. What Nigerians are benefiting is the availability of petroleum products, not affordability,” Olatide stated.
He called on the Federal Competition and Consumer Protection Commission to ensure greater transparency in pricing mechanisms.
“The FCCPC needs to push for transparency in how the Dangote refinery determines gantry prices. Nigerians need affordable and available fuel,” he added.
Also speaking, an energy law expert and professor at the University of Lagos, Dayo Ayoade, emphasised that competition remains a fundamental driver of pricing but noted that Nigeria’s current market structure limits its effectiveness.
“Well, prices are driven by competition. There is no doubt about it, and that is why all laws provide for competition between players in the market as a way of finding the best market price,” he said.
Ayoade, however, pointed out that Nigeria’s downstream sector is dominated by a single major domestic refiner, making true competition difficult.
“Now that competition, in the Nigerian market space, is a bit difficult. We only have one major player, the Dangote refinery,” he noted.
He contrasted domestic refining with import-based supply, highlighting the opacity surrounding international production costs.
“The production cost of imported petrol is not really known. It is the prices they send to us that are publicised. Whether they are under-selling the market or whatever, we do not know their production cost,” he said.
Despite these concerns, Ayoade argued that domestic refining offers broader economic benefits that should not be overlooked.
“We should not throw away the baby with the bath water. Competition is one element. National energy security is just as important,” he said.
“So if the pricing is not exploitative and the margins are similar, then of course, I would recommend domestic suppliers due to jobs, tax payments, and domestic capacity. On that note, Dangote is still better off,” he added.
The professor, however, criticised the lack of reliable and publicly available pricing data, urging regulators to fulfil their statutory responsibilities.
“My concern is about the robustness and the accuracy of the data available. The job of the Nigerian Midstream and Downstream Petroleum Regulatory Authority is to provide this data, and that is the kind of pressure I hope you would put on the regulator,” he said.
“This pricing should be brought out. It should be clear, put in easy digestible form, and made available to the public in line with the mandate of the Petroleum Industry Act,” Ayoade concluded.
The experts broadly agree that pricing is no longer primarily determined by landing cost, as domestic refining and aggressive competition for market share have taken centre stage.
Concerns also persist over the lack of transparency in how refinery prices are set, with calls for regulators to make pricing data more accessible and easier to understand. While some experts argue that domestic refining offers benefits such as energy security, job creation, and local capacity development, they stress that these gains must not come at the expense of affordability or market fairness, especially in a system where competition remains limited.
However, a significant shift has emerged in recent months. Over the last five months, the Dangote Petroleum Refinery has increasingly become the dominant supplier and price determinant of Premium Motor Spirit, accounting for over 90 per cent of domestic petrol supply.
This development is largely driven by the continued non-functionality of Nigeria’s three state-owned refineries and an import ban, leaving the market heavily reliant on a single large-scale local producer.
This dominance followed a series of strategic agreements with major downstream operators. In February 2026, the refinery concluded an offtake deal with 20 leading petroleum marketing companies to distribute between 60 million and 65 million litres of petrol daily across the country.
At this rate, the refinery is projected to supply between 1.8 billion and over 2 billion litres monthly, depending on output levels and the number of days in each month.
The latest agreement builds on an earlier failed deal reached in October 2025 between the refinery and downstream operators, which was aimed at curbing supply disruptions and moderating pump price volatility. At the time, independent marketers disclosed that the refinery planned to release up to 600 million litres of petrol monthly to the domestic market to ease persistent shortages and rising costs.
Under the current framework, endorsed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, selected marketers are responsible for nationwide distribution. These include MRS Oil Nigeria Plc, Nigerian National Petroleum Company Limited Retail, 11 Plc, TotalEnergies Marketing Nigeria, Rainoil Limited, Ardova Plc, Conoil Plc, among others.
The arrangement is designed to prevent supply disruptions and curb speculative practices across the distribution chain.
Despite these efforts, market realities suggest a more complex pricing picture. Findings by our correspondent show that since the offtake deal was signed, imported petrol has frequently been cheaper than the refinery’s gantry price, yet this has not translated into lower pump prices for consumers.
Data analysis indicates that from late February through April 2025, imported petrol was cheaper than locally refined supply on at least 23 occasions, including consecutive days between February 25 and 27. Even amid disruptions such as tensions in the Middle East, imported fuel has, at times, retained a price advantage, though this has not been fully reflected at retail outlets.
This price disconnect is due to the refinery’s dominant market position, which limits competitive price adjustments. However, officials within the Dangote Group have pushed back on this narrative.
A senior management source disclosed that the refinery has, in fact, been subsidising petrol and diesel supplied to the domestic market. According to the official, the ex-depot price of around N1,200 per litre remains below what would be expected under prevailing global crude prices, particularly following recent geopolitical shocks.
Another dimension shaping the conversation is the refinery’s profit margins. While official figures remain closely held, analysts suggest that the facility is benefiting from significantly high crack margins, the difference between the cost of crude oil and the value of refined products. Alan Gelder, Vice President at Wood Mackenzie, described the refinery as “highly profitable,” estimating gross margins above $30 per barrel in early April. This compares with an average of about $15 per barrel for European refiners, highlighting the advantage conferred by the refinery’s scale, configuration, and access to feedstock.
“European refiners are making about $15 per barrel, but Dangote is likely earning significantly higher margins, more than double, because of its configuration and access advantages,” Gelder said.
**The Watchdog Effect: media reportage driving transparency in Nigeria’s petroleum pricing system**
Beyond pricing and profitability considerations, transparency is fast emerging as a defining force in Nigeria’s evolving downstream petroleum market, with increased media scrutiny beginning to reshape how prices are set and adjusted.
Findings by our correspondent showed that sustained reportage on gantry prices, as well as regular comparisons with landing costs published in industry bulletins, is gradually introducing a watchdog effect in the sector.
It revealed that price movements often follow periods of heightened media attention, suggesting that both refiners and importers are becoming more responsive to public scrutiny when making pricing decisions.
“There was a time when petrol pricing at depots was never known and was treated as a closely guarded secret. Nigerians only knew the price at the pump but had no idea what it cost to make the product available,” Jeremiah said.
The source added that this information gap historically left consumers vulnerable to arbitrary pricing practices. “That lack of transparency made Nigerians susceptible to the whims and caprices of marketers and importers. But that has changed with deliberate initiatives aimed at entrenching price transparency, which has now been further amplified by consistent media reportage,” he stated.
Marketers have also acknowledged the impact of this shift. National officials of the Petroleum Products Retail Outlets Owners Association of Nigeria and the Independent Petroleum Marketers Association of Nigeria commended media organisations for deepening transparency in pricing, noting that increased visibility has helped demystify depot pricing and promote fairness across the value chain.
This growing visibility is introducing a new layer of accountability into Nigeria’s petroleum pricing system. By making pricing data more accessible, stakeholders, including consumers, regulators, and policymakers, are now better positioned to track, interrogate, and compare cost components across the value chain.
“This level of openness places pressure on market operators to justify their pricing decisions. In a sector that has long been characterised by opacity, the shift towards transparency could prove critical in driving competition and ensuring a more consumer-responsive market,” another industry expert said.
If sustained, the trend could compel operators to adopt more efficient pricing structures, while also strengthening regulatory oversight in line with the provisions of the Petroleum Industry Act.
Ultimately, the expectation that local refining alone would deliver cheaper petrol has proven overly simplistic. The Nigerian fuel market is influenced by a complex web of factors, including global oil prices, currency fluctuations, supply logistics, and competitive strategies. Local refining is a significant piece of the puzzle, but it is not the sole determinant.
As Dangote Refinery continues to scale operations and potentially expands capacity further, its influence is likely to grow.
But based on its first 22 months of operation, one point stands out clearly in this evolving landscape: petrol prices are not determined by production alone. Instead, they are shaped by competition, the constant push and pull between local supply and global alternatives. At the gantry, where these forces converge, the real story of Nigeria’s fuel pricing continues to unfold.
Damilola Aina is a journalist at Punch Newspapers with over five years of experience covering energy, business, investment, infrastructure, and property sectors. He specializes in producing well-researched and insightful reports that inform readers and provide clarity on complex topics. Damilola’s work demonstrates practical newsroom experience, editorial insight, and a strong commitment to accurate and engaging journalism.
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