Aliko Dangote, President of the Dangote Group, has raised alarm over a pricing imbalance that makes it more expensive for oil marketers to lift refined petroleum products from the Dangote Refinery in Lagos than from offshore terminals in Lomé, Togo, due to steep port charges and logistics bottlenecks.
Speaking at the West African Refined Fuel Market Conference co-hosted by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and S&P Global in Abuja, Dangote said the multiple port levies imposed on domestic shipments from the $20 billion Lekki refinery are undermining its cost competitiveness in the regional market.
“In terms of port charges, it is currently more expensive to load a domestic cargo of petroleum products from the Dangote Refinery, as customers pay both at the point of loading and at the point of discharge. But when they load from Lomé, which competes with us, they pay only at the point of discharge. This is simply unfair and unsustainable,” Dangote said.
Regulatory Disincentives Fuel Import Surge
According to Dangote, this cost structure discourages domestic sourcing and favours importation, thereby sabotaging Nigeria’s drive toward energy self-sufficiency and weakening efforts to conserve scarce foreign exchange.
Despite commissioning Africa’s largest refinery with a nameplate capacity of 650,000 barrels per day, Nigeria still imports around 69% of its refined petroleum needs often low-grade petrol, which he described as “toxic” and below European emission standards.
Oil analyst and CEO of Petroleumprice, Olatide Jeremiah, attributed the lower landing cost of imported petrol to its substandard octane ratings, which reduce the product value and price, making them more attractive to price-sensitive marketers.
Marketers Decry Dangote’s Sales Model
Independent petroleum marketers and downstream operators have also expressed frustration with what they describe as Dangote’s “restrictive pricing strategy.”
Speaking during a panel at the same event, Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) Executive Secretary, Olufemi Adewole, said the refinery’s opaque pricing and selective supply model prevent many marketers from accessing refined products.
“You don’t get the price upfront. It is only after clearance that a proforma invoice is issued. Meanwhile, it appears there is a preferred group the refinery trades with,” Adewole disclosed.
He noted that several independent marketers had registered interest in buying from the refinery but remain excluded due to limited access and delayed allocation procedures.
In a similar tone, Clement Isong, Executive Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), cautioned that without regulatory intervention, the refinery’s market dominance could evolve into a monopoly.
“Yes, an investor who has poured billions into refining deserves return. But regulators must act when one player begins to edge out all others. That’s not a market anymore; that’s a monopoly,” Isong warned.
Industry Caught Between Reform and Reality
Attempts to verify the port cost disparities revealed that many Nigerian marketers who lift products from Dangote’s gantry via road transport may not face the same charges as those using marine logistics. However, coastal traders especially those competing in the West African sub-region bear additional charges at both ends of the logistics chain, making Dangote products less appealing.
Chinedu Ukadike, spokesperson for the Independent Petroleum Marketers Association of Nigeria (IPMAN), clarified that marketers using the gantry for local distribution are largely shielded from international clearance costs. However, he confirmed the rising burden on coastal traders using sea vessels within Nigeria or across borders.
“It is easier for local marketers to load within the country because they avoid multiple international clearance layers,” Ukadike said.
The Way Forward
Industry stakeholders are calling on the NMDPRA and Nigerian Ports Authority (NPA) to harmonise port charges, streamline regulations, and provide equal playing ground for both importers and local refiners.
With Nigeria aiming to become West Africa’s refining hub, analysts say addressing these operational inefficiencies is crucial to attract local patronage, displace imports, and justify the government’s push for domestic refining through projects like Dangote’s.
Failure to act, they warn, could see the refinery operate below capacity while the market continues to be flooded with cheaper, substandard imports from offshore terminals.