Depot owners feel heat as Dangote Refinery resumes bulk sales at N877/litre
Nigeria’s downstream petroleum market is bracing for more shake-ups after the Dangote Refinery resumed full-scale operations this week and raised its Premium Motor Spirit (PMS), or petrol, gantry price by 7% to N877 per litre from N820.
The price adjustment, though an increase, remains below the N890- N900 per litre being charged by many private depot operators, positioning Dangote Refinery to reclaim market share and pressure independent fuel suppliers already grappling with tight margins and weakening liquidity
Data compiled by BusinessDay showed leading depot operators Pinnacle and Rainoil quoted wholesale rates of N890 and N885 per litre, respectively, while Optima and Matrix were selling at N880–N890 per litre. That differential of N10–N20 per litre could become a critical factor in pricing decisions across the retail network, where pump prices have remained volatile in recent weeks.
Industry sources stated that Dangote’s discounted gantry price applies primarily to buyers purchasing two million litres or more, indicating that only major marketers and bulk distributors are eligible. This tiered pricing approach effectively rewards high-volume traders and integrated marketers capable of handling large consignments and logistics costs.
Dangote’s pricing strategy is clearly scale-sensitive,” said a senior downstream executive who requested anonymity because they were not authorised to speak publicly. “For smaller depots or independent marketers who can’t buy in such volumes, the gap is enough to push them out of the competitive lane
The move could further accelerate consolidation in the downstream petroleum market, with smaller depots either forced into partnerships or acquisitions to stay afloat.
