In its effort to reduce the dependency on imported petroleum products, the Dangote Petroleum Refinery has reiterated its call for fuel marketers to adopt coastal loading options. This move is geared towards minimizing imports as the refinery can supply sufficient domestic needs.
However, the process of transporting petroleum products by sea to various depots within the country incurs additional logistics costs. The company has cautioned that opting for coastal evacuation could lead to an increase of approximately N75 per litre in fuel prices for consumers.
Despite the refinery’s commencement of operations at 650,000 barrels per day, the persistent importation of petroleum products remains, with marketers accounting for over 50% of supply.
This situation highlights the ongoing contention between Dangote and various fuel marketers—particularly those in the Major Energies Marketers Association of Nigeria (MEMAN) and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN)—regarding effective distribution methods.
While Dangote supports direct gantry loading from the refinery, marketers lean towards coastal distribution via vessels. The gantry loading method allows petroleum products to be dispatched directly using tankers, whereas coastal loading involves maritime transportation to coastal depots.
Many marketers have invested hundreds of billions in tank farms and depots throughout Nigeria. To boost delivery of products nationally, Dangote Refinery has invested over N700 billion in acquiring 4,000 trucks powered by compressed natural gas (CNG) for the direct distribution of Premium Motor Spirit (PMS), diesel, and aviation fuel.
Although imports have seen a decline since the refinery started operations, volumes remain elevated. According to recent statistics from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the refinery delivered 32.02 million litres of PMS in December 2025, with capacity utilization reaching 71%.
The regulator noted that PMS supply increased from 19.5 million litres daily to about 32 million litres, thanks to enhanced outputs from Dangote. However, it pointed out that these figures did not account for PMS designated for the domestic market, reflecting only volumes officially reported to have been trucked.
The data indicated that imports still contribute to more than half of PMS consumption, despite Dangote’s escalating production capacity. Earlier this month, the refinery assured that it remains stable and is poised to provide between 40 million and 50 million litres of PMS each day, contingent on market demands. On January 4, it produced 50 million litres, with 48 million litres dispatched that same day, maintaining stock levels sufficient for over 20 days of national consumption.
Dangote has been consistently supplying between 31 million and 48 million litres of PMS daily since December 16, 2025, with records verifiable through NMDPRA.
In a recent strategy to boost local sales, Dangote has provided marketers with the option of coastal loading but has cautioned that the associated logistics costs could push retail prices of PMS to nearly N1,000 per litre if forwarded to the consumers. Currently, petrol prices in Lagos range from N835 to N839 per litre, reaching as high as N950 in other regions of Nigeria.
The refinery underscores that gantry loading is the most economical and efficient means of product distribution, warning that heavy reliance on coastal loading may severely raise fuel prices due to maritime and port- related expenses.
Dangote explained that coastal logistics incurs port fees, vessel charges, and maritime levies, which do little to benefit consumers while significantly escalating pump prices. The refinery projects that coastal delivery could translate to an additional N75 per litre and, given Nigeria’s average PMS usage of 50 million litres a day, could represent a staggering N1.75 trillion in costs to the economy annually.
"These extra costs would ultimately be passed on to Nigerians through either inflated pump prices or diminished margins for operators in the supply chain," the refinery stated.
Additionally, it noted its gantry facility has 91 loading bays capable of dispatching as many as 2,900 tankers daily, facilitating the transport of over 50 million litres of PMS and 14 million litres of diesel continuously.
Dangote also renewed its calls for nationwide investments in pipeline infrastructure to lower distribution expenses and bolster energy security.
In addressing allegations of importing finished products, the refinery clarified that it only imports intermediate feedstock while its Residue Fluid Catalytic Cracking Unit undergoes maintenance. It emphasized that domestic refining has already contributed to reducing diesel prices from about N1,700 per litre to under N1,000 and PMS prices from approximately N1,250 to between N839 and N900.
Despite Dangote's willingness to explore coastal loading options, marketers maintain that products transported this way should be offered at a lower cost, contending that bulk transportation leads to reduced prices.
They further advocate that Dangote should cover port and transhipment fees, many of which necessitate payments in US dollars to agencies like the Nigerian Ports Authority (NPA) and the Nigerian Maritime Administration and Safety Agency (NIMASA).
A knowledgeable source indicated that while Dangote is agreeable to coastal sales, it is reluctant to absorb the additional N75 per litre logistics costs.
"Is it rational to transport products via vessel from Ibeju-Lekki to Apapa, only to rely on trucks for land distribution?" the source questioned, asserting that gantry loading helps avoid unnecessary expenses.
However, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) disagrees, with its National President, Dr. Billy Gillis-Harry, stating that coastal deliveries promote bulk procurement and should consequently be cheaper.
“When you transport 25,000 metric tonnes by vessel to Port Harcourt, it caters to multiple states simultaneously. This significantly reduces risks associated with road travel, delays, theft, and excessive checkpoints,” he explained.
A significant marketer added that coastal shipments reduce the necessity for thousands of trucks, asserting that bulk purchasing should inherently lead to lower pricing.
Professor Wumi Iledare, a Petroleum Economics expert, urges that this discussion revolves more around the economics of logistics rather than political implications.
“If coastal loading imposes an extra N75 per litre, we must assess whether that reflects genuine efficiency costs or indicates market dominance,” he emphasized, imploring NMDPRA to ensure that no logistics arrangement suppresses competitive practices.
“The relevance of a charge of N75 or N100 lies in whether it signifies a misuse of market power or is merely genuine cost recuperation. The focus should remain on transparency and efficiency, rather than which loading approach is utilized.”
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