Nigeria: Dangote refinery signs agreement to supply 28 million litres of petrol a day to the domestic market

Nigerian petroleum distributors have reached an historic agreement with the Dangote refinery, marking a turning point in the country's fuel supply. The deal, worth $20 billion, guarantees the supply of at least 28 million litres of petrol per day over a period of six months to meet the needs of the domestic market. The announcement was made at the weekend, following a strategic meeting of stakeholders in Abuja.

The Dangote refinery on the outskirts of Lagos recently reduced the price of ex-depot petrol from 990 Naira to 970 Naira per litre, a move welcomed by industry players and seen as a way of thanking Nigerians for their support. Anthony Chiejina, Dangote's Group Brand and Communications Director, said the reduction was aimed at easing the burden on consumers while promoting market stability.

During the meeting in Abuja, it was decided that petroleum distributors would stop importing fuel, unless the products supplied by Dangote were unavailable. This decision is part of a strategy to strengthen the capacity of local refineries to meet national demand. Signatories to the agreement include key organisations such as the Nigerian National Petroleum Company Limited (NNPC), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), as well as refineries such as Waltersmith and Aradel.

The National Chairman of the Petroleum Products Retailers Association of Nigeria (PETROAN), Dr Billy Gillis-Harry, expressed confidence in the positive impact of the agreement. He stressed that this resolution will stabilise supply, control price fluctuations, and strengthen transparency and collaboration between industry players.

Despite initial concerns about the Dangote refinery's ability to maintain consistent production and distribution, management reassured stakeholders of its readiness to manage the country's fluctuating demands. Dangote also announced a continued increase in production to ensure security of domestic supply.

The new agreement also provides for enhanced management of petroleum products such as aviation fuel and diesel, which will be allocated according to the capacity of local refineries. Oil marketing companies will have to enter into direct agreements with refineries to ensure smooth delivery.

At the same time, the Dangote refinery has demonstrated its international ambition by increasing its exports of refined products. According to a report by S&P Global Commodity Insights, significant quantities of paraffin, naphtha and diesel have been exported to destinations such as South Korea, Ghana, and several European airports, including Heathrow in London. This performance positions Nigeria to become a net exporter of petroleum products by 2026.

The agreement signed with the Dangote refinery marks a crucial step for the Nigerian oil sector. It reflects a shared commitment to reducing dependence on imports, stabilising the domestic market and fully exploiting the potential of local refineries. As the country prepares to maximise its capacity, this initiative has the potential to transform the oil economy in a sustainable way and strengthen Nigeria's role on the global energy stage.