‘How growing refining capacity may affect private depots’

Local refining of premium motor spirit (PMS) or petrol is experiencing a boost capable knocking off importation of the product.

Analysts believed there could be dramatic changes in the structures of the downstream petroleum sector barring any disruption to local refining operations of the product.

Data released by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) showed that out of an average 74.2 million litres of petrol supplied daily last month, imported petrol accounted for 42.2 million litres per day, while 32 million litres were supplied by local refineries, essentially due to an increased supply from the Dangote refinery. The 42.2 million litres daily import in December 2025 was a 19 per cent reduction from that of the preceding month of November which was 52.1 million litres daily.

Although the Dangote refinery boast of the capacity to supply 50 million litres daily, the NMDPRA figures indicated that Refinery significantly bolstered depot stocks by supplying an average of 32 million litres per day in December 2025, representing a 64 per cent increase from the previous month.

Interestingly, despite the rise of product supply from the Dangote refinery, importers brought in 1.5 billion litres of petrol in November 2025 to cover shortages in September and October 2025.

But the tide seems to have slowed down. So far this year, Nigeria’s imported petrol stocks in depots have seen a sharp decline as local refining capacity increases.

The influx of locally refined products is now changing the dynamics in the sector leading to what may be termed a “price war” at private depots this year. As of early January 2026, private depots such as Eterna, Integrated and Aiteo were selling at N710 to N800 per litre.

On the reverse, local refiners like Dangore refinery has maintained its ex gantry price at N699.

Initially, despite lower depot prices, average retail pump prices remained higher, often between N890 to N910 per litre, however, most retailers are now being compelled by market forces to crash their price to matching that of MRS filling station- a major partner with Dangote Refinery , to sell at N739 and N770 per litre. As of early January 2026, private depots raised prices, with some selling imported petrol at around N800 per litre, while Dangote sold at lower rates.

Beneath the pricing war is the potential danger refining locally poses for private depots. An oil and gas consultant, Mayowa Sodipo, argued that with local refining now finding its bearing in the country, private depots will be grossly affected. He explained that towards the close of last year and beginning of this year, the shift from an import-dependent model to a local supply model caused traditional, independent private depots to experience reduced throughput, shrinking margins and a loss of market share, with many facing an existential crisis as of late 2025.

“The resurgence of local petrol refining has impacted on satellite petrol depots, fundamentally restructured their operations,’ Sodipo said.

According to him, private depots now experience a declining throughput especially for those of such facilities located in Lagos, which he said experienced utilisation rates falling below 40 per cent in late 2024 as imports dropped.

Besides, he noted that the involvement of the Dangote Refinery, which has shifted to selling directly to large marketers and consumers using its own fleet of 4,000 CNG trucks, bypassing traditional third-party depot intermediaries, will greatly take a toll on the depots.

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He cited reports in September 2025 which indicated that private, independent depots were being bypassed, with many marketers preferring direct, cheaper supply from the refinery. He added that the naira for crude policy for local refiners has made it possible for them to supply the market at lower prices, forcing depot owners to cut their own prices, reducing their margins and, in some cases, forcing them to sell at a loss.

“While Dangote reduced its gantry price to N699 per litre, other marketers and independent depot owners were forced to align with higher rates or face, with some still struggling to keep up with the lower prices.

“The era where private, independent depots held a monopoly on fuel distribution is over. Local refining has transformed these depots from essential storage and distribution hubs into, in some cases, stranded assets or underutilised facilities, as the market moves towards direct, factory-to-station delivery,” Sodipo argued.

The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, in an interview cast doubt on petrol importation at the moment. “Well, since Dangote has reduced his price, and we have not complained of a shortage of products. So, you will find out that the supply chain is stable. So, that one, literally, has also cancelled all these accusations and counteraccusations on petrol importation. I don’t think anybody is importing within this period on that regime. Nobody is importing now. I’m sure that nobody is importing. So, all the supplies we are getting now are from Dangote. You know Dangote has also opened up the market for independent marketers,’’ he said.

Although the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) maintains that it is not against local refining and are ready to source products locally if terms are fair, they want local refineries to provide products at competitive prices and ensure open access, similar to international market dynamics.

Besides is the subsidy demand from local refineries they seek, especially coverage of cost on freight, NIMASA/NPA costs, to cover expenses, arguing it is necessary to compete with cheaper imported products.

Sodipo contended that the shift to local refining threatens their import-focused depot infrastructure, especially with the Association’s members feeling their traditional role is already being diminished with local refining.

Industrialist and business tycoon, Femi Otedola, also a former DAPPMAN member, urged depot owners to pivot from holding tanks to owning last-mile retail outlets, a strategy for the new self-sufficient era.