Why Dangote Refinery suspended petrol sales to Lagos depots

Dangote Petroleum Refinery has suspended coastal sales of Premium Motor Spirit (PMS) to depot owners and importers in Lagos, putting fresh pressure on a market where petrol prices have already crossed ₦1,200 per litre. Sources familiar with the refinery’s operations say the move is deliberate, aimed at redirecting locally refined petrol to areas where imported supply is scarce.

The suspension is ongoing. A source said: “The suspension of coastal sales to Lagos is still ongoing. It is aimed at redirecting products to locations where imported products are unavailable. Lagos has quite some imported petrol.”

Strategy to reach underserved markets

Dangote Refinery is prioritising markets where imported products are either unavailable or less dominant, rather than adding more supply to Lagos, which receives substantial volumes of imported petrol. The strategy is intended to ensure locally refined petrol reaches areas where it is most needed.

The decision comes amid concerns at the refinery over the volume of imported petrol entering Nigeria. According to data available to the refinery, imported PMS accounted for about 43 per cent of total petrol supplied into Nigeria in July. That figure is significant enough to influence production, inventory and distribution decisions.

Imports create uncertainty for local production

The refinery has also questioned the continued issuance of petroleum product import licences despite its stated capacity to meet and exceed Nigeria’s domestic petrol requirements. Uncertainty over the volume and timing of imports makes it difficult to forecast how much locally refined product the market will absorb.

To maintain uninterrupted supply, Dangote Refinery keeps substantial volumes in inventory and commits significant funds to storage, logistics and working capital. But holding large inventories becomes expensive when competing imports and their arrival schedules are not visible.

The refinery said its increased petrol exports in recent months should not be read as an inability to supply Nigeria. Rather, exports provide an outlet for products that cannot be efficiently absorbed domestically because of competing imported supplies. When products sit in storage for long periods, financing and logistics costs rise, so evacuating excess volumes is necessary to keep operations efficient.

Dangote Refinery has consequently called for greater transparency around import licences, expected product inflows and improved coordination among downstream industry players.

Pressure on Lagos traders and consumers

For Lagos-based fuel traders, the immediate concern is the continued suspension of coastal PMS sales from Dangote Refinery. The refinery is instead prioritising markets where imported petrol is less available, potentially squeezing marketers who depend on coastal supplies.

The development highlights the growing tension between locally refined petrol and imported products as Nigeria’s downstream sector adjusts to the emergence of a major domestic refinery. With petrol prices already above ₦1,200 per litre in some areas, the latest supply shift could become another factor shaping pump prices across Lagos and beyond.

Legit.ng earlier reported that Dangote Refinery supplied 25.8 million litres of Premium Motor Spirit per day to the Nigerian domestic market in July 2026, down 21 per cent from 32.5 million litres per day in June, according to the Nigerian Midstream and Downstream Regulatory Authority (NMDPRA). That was the lowest monthly domestic supply the refinery recorded in 2026.