Dangote stops petrol sales to fuel importers

The Dangote Petroleum Refinery has ceased supplying Premium Motor Spirit (petrol) to major marketers engaged in importing petroleum products into Nigeria.

A refinery representative confirmed this development to our correspondent, indicating that the refinery would discontinue petrol sales to entities blending Dangote fuel with imported grades.

"We are discontinuing petrol sales to those engaged in importation, as they are attempting to blend our superior-quality products with their substandard imported alternatives," the source explained, requesting anonymity due to restrictions on media engagement.

A second source informed our correspondent that the refinery now prioritizes selling its petrol to members of the Independent Petroleum Marketers Association of Nigeria and other entities without import operations. "We are supplying independent marketers and others who do not engage in importation," the source stated.

It was reported that this decision prompted certain marketers to pursue legal action seeking an order requiring the Nigerian Midstream and Downstream Petroleum Regulatory Authority to continue issuing import licenses.

The marketers expressed concern that they could face supply shortages if unable to import fuel while the Dangote refinery restricted petrol sales to them. Dangote had previously announced its intention to cease business transactions with fuel importers, whom it accused of blending its Euro-5 petrol grade with imported alternatives.

The refinery is apprehensive that such practices could compromise the ability to differentiate between products supplied directly by the refinery and products subsequently blended or managed by intermediary parties

“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,” the refinery said last month.

In response, importers and petroleum marketers objected to the limitation imposed on petrol sales to marketers engaged in petrol importation, characterizing the action as an effort to obstruct the importation process. The marketers further demanded that the refinery substantiate its assertion that imported petrol circulating within the Nigerian market fails to meet the stipulated quality requirements.

The marketers, who requested anonymity, contended that Dangote was endeavoring to impede petrol importation. "We are cognizant of Dangote's intentions. He is merely attempting to restrict imports," stated one marketer. The marketer maintained that a petroleum supplier cannot determine whether consumers should utilize its product exclusively or combine it with fuel procured from alternative sources.

Drawing a parallel to motorists refueling at various service stations, the marketer asserted that Dangote could not prohibit consumers from blending products obtained from multiple suppliers.

"For instance, when you purchase petrol from a TotalEnergies station and subsequently travel further, only to find your fuel depleted, you then acquire petrol from MRS. Can TotalEnergies prohibit you from combining its petrol with MRS petrol? Certainly not. I cannot comprehend the strategy that the Dangote refinery is employing," he elaborated.

A second marketer similarly contended that the Federal Government bears the obligation to guarantee adequate petrol availability and safeguard consumer interests, emphasizing that importation remains essential when domestic production diminishes.

Hamed Fashola, National Vice Chairman of the IPMAN, remarked that the Dangote refinery exercises selectivity in determining its petrol purchasers, as not all prominent marketers participate in importation.

“I don’t know how far that is correct; Dangote now sells to only IPMAN. I think somehow the information I have is that Dangote is selective about it, say those that are involved in importing. I think it’s not everybody that is importing,” he said.

Clarifying IPMAN’s purchasing position amid market competition, Fashola noted that independent marketers operate flexibly to secure the most competitive pricing, sourcing supply indiscriminately from both local refineries and importers.

“We buy our product anywhere we feel it is cheap. Anywhere we see the product, we go for it, both Dangote and the importers. We always go for the best price,” Fashola stated.

Meanwhile, the National Publicity Secretary of the IPMAN, Chinedu Ukadike, expressed the belief that the Dangote refinery is open to doing business with anyone.

Ukadike noted that independent marketers are ready to buy and sell petrol from all suppliers, stressing that they were not currently involved in importing the product.

While saying he would not know if importers truly blend Dangote’s petrol with imported petrol, he concluded that Dangote is in the best position to determine whatever it can do to discourage blending.

“I believe that the Dangote refinery is open for business and that it will continue to sell to marketers. The issue of blending, I cannot say yes or no, because I’m not part of those who are importing. Independent marketers are not importing yet; we are just marketers who buy and sell.

“So, if there is any measure to discourage adulteration of petroleum products by Dangote, I think the refinery and its experts know best. They know the best way to deal with that. But our own is to continue to buy and sell to marketers. If there is a way to discourage adulteration of petroleum products, I won’t stop Dangote from doing so,” Ukadike added.