The escalating row between Dangote Petroleum Refinery and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has reignited old tensions in the downstream sector, exposing deep-seated fears about market dominance, policy inconsistency and the future of deregulation. What began as a tussle over pricing and logistics has evolved into a major test of the credibility of Nigeria’s energy reforms, raising uncomfortable questions about whether the government can balance the interests of a new industrial giant with the survival of long-established players, Waliat Musa reports. 

For years, marketers and refiners have fought over access, pricing and regulatory favouritism. But Dangote’s entry into the sector has raised the stakes. The refinery’s vast capacity and strategic positioning make it both a potential stabiliser of fuel supply and a lightning rod for accusations of monopoly. DAPPMAN’s resistance signals more than a commercial dispute. It reflects broader anxieties within a sector that is still struggling to reconcile full deregulation with entrenched market interests and weak institutional oversight.
 
For decades, fuel supply in Nigeria has been trapped in scarcity, subsidy distortions and import dependence. Hence, the commissioning of the 650,000 bpd Dangote Refinery was hailed as the end of years of fuel scarcity. Yet, barely a year into full petrol production, a new confrontation between the refinery and depot owners under DAPPMAN has revived old questions about cost, control and competition in the downstream sector.
 
The confrontation between Dangote Petroleum Refinery and DAPPMAN has once again reopened the uneasy debate at the heart of Nigeria’s downstream sector: whether the country’s historic embrace of deregulation can thrive in the shadow of the uneven spread of market share.
 
In the past week, the refinery and marketers have exchanged a flurry of statements that underscore not only the fragility of reforms but also the deep distrust among operators. Dangote alleged that DAPPMAN members are engaged in product diversion and arbitrage, even as the refinery disclosed that the marketers demanded a N1.5 trillion yearly subsidy to match its gantry price at their depots.
 
DAPPMAN fired back with a seven-day ultimatum, dismissing the diversion allegations as “misleading and factually incorrect” while rejecting suggestions that it sponsored labour unrest and raising safety concerns over the refinery’s rollout of compressed natural gas (CNG) trucks.
 
This is not the first time the country has witnessed such bitter exchanges. Since Dangote commenced petrol production in 2024, clashes with marketers and unions have been recurring. At the centre of each episode lies a struggle over control, pricing models, logistics conflicts and credibility.
 
In 2024, there were initial fears of dominance, even before the refinery’s first petrol cargo was released. Independent marketers warned of the dangers of centralising supply in one source. Concerns were raised that while the refinery was a national asset, it could distort competition if not matched with policy safeguards.
 
Then, in late 2024, pricing disputes erupted as Dangote’s announcement of gantry pricing lower than that of many depots triggered immediate pushback. Marketers complained that without coastal access, they would incur additional logistics costs. By December, some accused the refinery of creating an uneven playing field by offering foreign traders discounts of over $40 per metric tonne while restricting Nigerians to gantry lifting.
 
In early 2025 through to mid-year, labour friction and strike threats erupted just as the refinery expanded fuel distribution. The National Union of Petroleum and Natural Gas Workers (NUPENG) and the National Association of Road Transport Owners (NARTO) raised grievances over conditions for truck drivers. A strike threat loomed, with Dangote accusing the unions of intimidation while insisting it would not compel workers into union membership.
 
Furthermore, reports surfaced that the refinery sought sulphur waivers to sell products above the 50 ppm threshold mandated under the Petroleum Industry Act (PIA).
 
Marketers, including DAPPMAN, leveraged this to question both the refinery’s compliance and the consistency of regulatory enforcement by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
 
In recent weeks, the diversion and subsidy row has raised the stakes further. Dangote alleged that DAPPMAN members were diverting products to neighbouring countries and that marketers had demanded a N1.5 trillion yearly subsidy. DAPPMAN, in turn, issued an ultimatum, denied the allegations, and accused the refinery of undermining regulators and endangering road safety with its CNG truck rollout.
 
An energy economist, Kelvin Emmanuel, explained that the association’s demand includes 70 kobo per litre for coastal freight and 5 kobo per litre for loading from Dangote’s Special Purpose Marine Terminal in Lekki to Apapa. Based on the assumed national petrol and diesel consumption of 70 million litres, the amount translates into the staggering figure being demanded as under-recovery, he said.
 
Emmanuel described this demand as “outrageous”, arguing that under a deregulated market, sales should reflect true market reality, not subsidised offsets.
 
“This is outrageous because the government has deregulated PMS in Section 205 and sales of products should reflect market reality. The whole unionisation shout has nothing to do with the actual welfare of workers as the unions are now a willing tool to fight the only domestic commercial refiner that risks capital to build the largest single-train refinery in the world,” he said.
 
He further warned of international scrutiny, noting that “it is a dangerous signal that the international community is watching the battles that Dangote has to fight daily because he decided to backwardly integrate a sector that was costing Nigeria $28 billion in FX outflows yearly”.
 
An energy law specialist at the University of Lagos, Prof. Dayo Ayoade, described the row as an inevitable clash of interests, noting that Dangote Refinery was resisting what it sees as an extra layer of bureaucracy and cost, while DAPPMAN is trying to preserve a middleman role it enjoyed under state-owned refineries. In Ayoade’s words, “that will no longer work”.
 
He argued that the dispute should be seen as part of normal competition in a deregulated market where efficiency, not entitlements, should determine survival. On subsidy claims, he was clear that consumers should not be made to pay for inefficiencies in DAPPMAN’s sprawling infrastructure, stressing that “DAPPMAN must evolve with the market”.
 
On the diversion saga, Ayoade pointed out that fuel smuggling has long plagued the sector and that only regulators can verify or disprove such allegations. He warned that the silence of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) amid public accusations suggests institutional failure.
 
Beyond the immediate clash, he faulted Nigeria’s dependence on truck-based distribution, stressing that pipelines remain the cheapest and most efficient option. While he downplayed immediate investor concerns, he warned that prolonged disputes risk undermining confidence if they persist.
 
“Most of these quarrels should not be there if the Nigerian government, NMDPRA and NNPC Limited do their jobs properly. The downstream sector should not be moving our fuel by tankers or CNG trucks. We should be moving fuel by pipelines — they are the cheapest, most efficient and most effective means of transport.
 
“Investors will be concerned that we are quarrelling over everything, but these are teething problems anyway. How many investors are going into the downstream and refinery sector? Those who want to do so are powerful people with money to spend. I don’t think this kind of turf war would affect their investments for now. But if it drags on for years, then all of us have to be concerned about undermining investor confidence,” he said.
 
An energy expert, Dr Ayodele Oni, argued that the disputes go beyond normal competition and point to deeper dysfunction in the market. Unlike healthy rivalry, he noted, these clashes involve financial disputes and allegations of malpractice that destabilise reforms.
 
He pointed in particular to DAPPMAN’s demand for N1.5 trillion to offset logistics costs, which Dangote has flatly rejected. Oni cautioned that such a demand effectively mirrors a subsidy, despite Nigeria’s recent and painful removal of fuel subsidies.
 
“Nigeria has just undergone a painful and controversial removal of fuel subsidies with roots in unsustainability and susceptibility to corruption. A direct financial payment from Dangote to marketers to offset transport costs, effectively enabling them to sell at a particular price, mirrors the mechanics of a subsidy. 

This demand would distort market forces by artificially lowering costs for a segment of the distribution chain, rather than allowing pricing to reflect the true cost of production and distribution. It could create a moral hazard, where marketers are incentivised to rely on these payments rather than invest in improving their own logistics efficiency or exploring alternative distribution models (e.g., pipelines, strategic depots).

Examining the demand by DAPPMAN shows signs of subsidy being reintroduced under another guise,” he warned, stressing that this could create a dangerous precedent and distort market forces.
 
Beyond costs, Oni underlined that Dangote’s allegations of smuggling and diversion, if true, are symptomatic of a dysfunctional market where arbitrage opportunities are exploited at the expense of competition. He warned that such disputes ultimately create hardship for consumers, reduce efficiency, and risk undermining confidence in Nigeria’s downstream deregulation drive.

“Dangote’s claims of product diversion and smuggling against DAPPMAN members go beyond normal competition. Such allegations, if substantiated, point to attempts to exploit market inefficiencies and arbitrage opportunities, which destabilise the market and create an uneven playing field. This is characteristic of a dysfunctional market where illicit practices distort genuine competition,” Oni said.

These recurrent disputes are not merely corporate quarrels. They cut into the credibility of the Tinubu administration’s deregulation drive. The Petroleum Industry Act (PIA) of 2021 had envisioned a liberalised downstream sector, one that would attract competition, diversify supply, and remove distortions caused by subsidies.
 
This polarity, however, exposes the weakness of regulators caught in the middle. When Dangote suggests diversion to neighbouring countries, it indirectly questions the effectiveness of the NMDPRA, Customs and border agencies. When DAPPMAN accuses the refinery of waivers on sulphur content and restrictive logistics, it challenges the state’s consistency in enforcing standards. Both sides pull regulators into a legitimacy contest, undermining confidence in the process.