Depot Owners Cry Out as Dangote Refinery Crashes Price, Dominates Market

• The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has raised an alarm over Dangote Refinery’s influence
• The association disclosed via its executive secretary, Olufemi Adewole, that the refinery’s size gives it an edge over the market
• He stated that there are no cabals in the downstream petroleum sector, but people with vested interests, who have invested billions into the sector

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has raised an alarm over what it says is an emerging market control in the downstream petroleum industry.

The marketers warned that control of the Dangote Refinery could disrupt the market if not properly managed.

Depot owners cry out against Dangote Refinery’s dominance

DAPPMAN’s executive secretary, Olufemi Adewole, disclosed this in a recent TV interview on Friday, May 9, 2025, saying that there are no cabals in the system as alleged by Aliko Dangote.

Adewole, however, said there are vested interests among private depot owners who have invested billions in the sector.

He said the depot owners stood by Nigerians in times of dire need before the emergence of the Dangote Refinery.

According to the DAPPMAN scribe, the Dangote Refinery has not met the petrol consumption demands of Nigeria, which has reduced recently.

He said ending fuel imports for now would create chaos, stating that a phased strategy is more agreeable once domestic refineries begin production.

He also expressed worry, saying the scale of Dangote Refinery gives it an excessive edge over pricing and supply channels.

Marketers caution FG over planned import ban

The DAPPMAN spokesman said that stopping the importation of petroleum products could cause chaos and monopoly, stating that the time is not yet ripe for the move.

Punch reports that Adewole praised the downstream regulators, saying that they have been doing a good job in ensuring that organisations do not depart from the Petroleum Industry Act's provisions.

He cited the lawsuit instituted by Dangote against the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) and other marketers.

According to him, NMDPRA has maintained market integrity under the law, noting that Dangote Refinery’s legal action shows a desire to bypass market checks.

He alleged that association members are not getting a fair product pricing from the mega refinery, saying that the plant prefers selling only to a few marketers via gantry supplies, rather than bulk depot loading.

Dangote Refinery’s price cuts lead to losses

He also said that price cuts by the refinery after carges have left the loading gantry have left marketers incurring losses quietly.

Adewole said that the cost of petroleum products is based on multiple layers ranging from crude price to refinery margins, logistics and retail costs, stressing the impact of operational inefficiencies and high financing costs.

“Depot operations are tough. Equipment is ageing, and capital costs are high. To import 20,000 metric tons, a marketer needs an exposure of over N20 billion. Most of this is bank-funded at high interest rates, “he stated.

Dangote tackles marketers

The Dangote Petroleum Refinery has refuted claims made by fuel marketers that it is unable to meet domestic fuel demand.

The refinery maintains that it has ample fuel reserves to meet Nigeria’s energy requirements, with additional surplus available for export.

A senior official at the refinery stated that it continues to supply fuel to international markets even after fulfilling domestic needs.

The executive highlighted that millions of litres of fuel are dispatched daily, questioning how marketers could assert the refinery's inability to meet the country’s fuel demand.

The official also suggested that Nigeria's fuel consumption data has been distorted over the years for various agendas, particularly during the fuel subsidy period.

He expressed confidence that the true consumption figures will eventually be revealed for the public to scrutinise.

The official said:

“I have seen different reports where the marketers alleged that our refinery could not meet local demands. That is not true. We produce more than enough fuel for the local market, and we export.”

Marketers speak amid plans to ban fuel imports

Legit.ng earlier reported that the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has warned the Nigerian government against imposing a blanket ban on imported goods, especially petroleum products.

The marketers disclosed that the move could cause economic and supply chain issues.

PETROAN’s warning comes as the Nigerian government said it will restrict the import of foreign goods that could be produced locally.

The article was updated with additional information by the head of the business desk, Victor Enengedi.

Source: Legit.ng