A fresh dispute is emerging in Nigeria’s downstream petroleum sector as the Dangote Petroleum Refinery moves to restrict petrol sales to marketers who also import fuel, while the Federal Government continues to permit selected companies to bring petrol into the country.

The latest development has reopened a broader debate over whether Nigeria should prioritise domestically refined petrol or maintain imports as a safeguard against supply shortages.

Dangote Refinery confirmed that it has stopped selling Premium Motor Spirit (PMS), commonly known as petrol, to major marketers involved in importing petroleum products. Refinery officials said the decision was prompted by concerns that some marketers could blend its petrol with imported products.

The refinery is instead prioritising sales to independent marketers and other buyers that do not import petrol, according to officials familiar with the decision.

The move has drawn criticism from sections of the petroleum marketing industry.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) rejected the allegation that marketers were blending Dangote petrol with imported products and argued that Nigeria should maintain multiple sources of supply.

PETROAN National President Billy Gillis-Harry said allowing both domestic refiners and importers to operate would promote competition and strengthen supply security. Marketers have also warned that restricting supplies to companies that import petrol could create disruptions if alternative supplies are insufficient.

The disagreement comes at a time when Nigeria’s fuel supply structure is changing rapidly.

Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) shows that locally refined petrol has overtaken imports as the larger source of domestic supply.

In August, domestic PMS receipts rose by 39 per cent to 35.9 million litres per day, while petrol imports fell by 26 per cent to 14.6 million litres per day.

Overall, Nigeria received an average of 50.5 million litres of petrol daily during the month. Domestic supplies therefore accounted for about 71 per cent of total PMS receipts, compared with roughly 29 per cent from imports.

The Dangote refinery alone supplied about 35.87 million litres of petrol per day to the domestic market in August.

The figures demonstrate how significantly the refinery has altered Nigeria’s traditional dependence on imported refined petroleum products.

But imports have not disappeared.

Despite the increase in domestic refining, the NMDPRA approved petrol import permits covering approximately 830,000 metric tonnes for the fourth quarter of 2026.

The licences were issued to six companies — Matrix Energy, A.A. Rano, AYM Shafa, NIPCO, Pinnacle Oil and Bono Energy — as the government seeks to maintain sufficient supplies amid changing conditions in the international fuel market.

The decision has intensified the disagreement with Dangote Refinery, which has challenged the continued issuance and renewal of petrol import licences in court.

Dangote has argued that imports should only be permitted where domestic production cannot adequately meet national demand, pointing to provisions of the Petroleum Industry Act. The refinery filed a fresh legal challenge in May against import licences granted to marketers and the Nigerian National Petroleum Company.

The government and marketers, however, have maintained that imports can play a role in ensuring adequate supply and preventing shortages.

The dispute took a new legal turn in September when the Federal High Court in Abuja ordered the NMDPRA to continue issuing and renewing petroleum-products import licences for Matrix Energy, A.A. Rano and AYM Shafa, provided the companies meet the relevant statutory and regulatory requirements.

The court held that the regulator’s refusal to issue or renew the licences was inconsistent with provisions of the Petroleum Industry Act.

The ruling effectively strengthened the position of marketers seeking continued access to imported petrol, even as Dangote pushes for greater reliance on domestic refining.

At the centre of the dispute is a fundamental question about Nigeria’s downstream petroleum market: Should the country rely primarily on domestic refining, or should imports remain available as a competitive and emergency supply source?

Dangote’s position is that increased imports could undermine investments in domestic refining, particularly when Nigerian refineries are capable of supplying a significant portion of national demand.

Marketers argue that competition between domestic refiners and importers can protect consumers by providing alternative sources of petrol and reducing the risk of supply shortages.

The government, through the NMDPRA, appears to be maintaining an import window while domestic refining capacity expands.

That position is also reflected in the regulator’s latest data. Although domestic petrol supply exceeded imports substantially in August, imports still accounted for 14.6 million litres per day.

Nigeria’s petrol market is therefore entering a new phase.

For decades, the country depended heavily on imported refined fuel despite being a major crude oil producer. The arrival of the Dangote refinery has changed that balance, but the transition has not eliminated questions about pricing, competition, distribution and supply security.

The latest confrontation could have consequences beyond the businesses involved.

If more marketers are forced to choose between importing petrol and buying from domestic refiners, the structure of fuel distribution could change significantly. Conversely, if imports remain widely available, domestic refiners may face continued competition in a market where they are expected to play a larger role.

For consumers, the central concern will ultimately be whether the competing supply models translate into reliable availability and stable petrol prices.

For now, the battle between Dangote Refinery, fuel marketers and the regulator remains unresolved, with court decisions, import permits and commercial negotiations all shaping the next phase of Nigeria’s downstream petroleum market.