Dangote cuts petrol supply to marketers who still import

Aliko Dangote’s refinery has restricted petrol sales to major marketers that continue importing the fuel, citing concerns that they are blending imported product with its output and damaging the integrity of its brand.

The measure took effect late last week, according to Nigerian outlets, after Vanguard first reported it was under consideration. The refinery has not issued a formal public statement.

“It is difficult to understand why we would invest heavily in producing high-quality petroleum products for Nigerians, only for those products to be mixed with imported products of uncertain quality and the resulting product to be associated with the refinery,” a source familiar with the refinery’s position told Vanguard.

Africa’s richest man is now using supply as leverage in a fight he has been losing in the licensing process. The restriction denies product to marketers who buy from his competitors a commercial weapon, not merely a quality-control measure in a domestic fuel market worth roughly $10.3 billion a year in which his refinery already supplies the large majority of petrol. It also lands as pump prices climb. Petrol passed N1,300 a litre (about $0.97) last week, with marketers raising rates three times in seven days.

In May, Dangote sued Nigeria’s attorney general at the Federal High Court in Lagos seeking to cancel petrol import licences granted to NNPC and six marketers NIPCO, AA Rano, Matrix Energy, Shafa Energy, Pinnacle Oil and Gas, and Bono Energy. NNPC told the court that Dangote’s products are sold at “significantly high and fluctuating market prices” and that imports must continue to prevent monopoly control and protect consumers.

Regulators had suspended new import permits in February and March after data showed the refinery supplying more than 90 percent of domestic petrol consumption. Fresh licences were subsequently issued, which Dangote said on 26 August were squeezing the plant.

The refinery’s nameplate capacity is 650,000 barrels a day, raised to about 700,000 after February maintenance and briefly exceeded during a licensor performance test. Dangote Industries has said it intends to reach 1.4 million bpd within 30 months.

Nigeria’s seaborne petroleum-product shipments averaged 561,000 bpd in the second quarter, against an annual average of 79,000 bpd in 2023, according to the US Energy Information Administration. Intra-Nigerian shipments rose to 211,000 bpd from 33,000 bpd in 2023.