Marketers worsen economic hardship over hike in fuel, gas prices

…as Dangote Refinery battles technical hitches

By AYOOLA OLAOLUWA

Nigeria’s downstream petroleum sector is currently under siege from powerful oil cartels taking advantage of a temporary disruption in the supply of petrol and Liquefied Petroleum Gas (cooking gas) to the Nigerian market to inflate prices, Business Hallmark findings have revealed.
Many marketers, including filling stations and tank farm owners, checks revealed, have created artificial scarcity in an attempt to make huge profit from the limited products supplied into the market by Dangote Refinery, which has been battling to repair some faulty parts of the plant that have prevented it from attaining full production capacity.
There has been a massive shortfall in the volume of refined petroleum products that enters the Nigerian market since October after petroleum workers under the umbrella body of National Union of Petroleum and Natural Gas Workers (NUPENG) and Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) embarked on two major industrial actions to protest against the alleged refusal of Dangote Refinery’s management to allow the plant’s workers unionize.
While it lasted, the first industrial action, apart from temporarily disrupting commercial activities at the refinery, led to fuel scarcity in some parts of the country. Order was later restored after the intervention of the Federal Government.

Bad Situation Compounded

However, a second strike in October, which dragged on for three days disrupted the flow of petroleum products, especially Petroleum Motor Spirit (popularly known as petrol) and Liquefied Petroleum Gas (cooking gas), as marketers capitalized on the disruption in supply to hike prices.
While the price of cooking gas, a major product by the Dangote Refinery hit the roof, selling for N2,500 in some parts of the country, the price of a liter of petrol went up to about N1,000 from the previous average price of N900.
However, over a month after the resolution of the dispute between Dangote and aggrieved labour unions, things have not returned to normal despite assurances by government, industry regulators and stakeholders that relief was on its way.
While gas plants and neighborhood sellers are continuing to sell cooking gas to Nigerians at exorbitant prices, petrol tank farms and filing stations owners are also hiking the price of petrol despite getting their present stocks at a relatively lower rates, BH findings revealed.
For instance, a liter of petrol at NNPC stations in Lagos and Abuja presently goes for N928 and N955 respectively, while other fuel stations sell from N935 to N970 in the two cities.
Also in parts of Ogun, Edo, and Oyo States, motorists purchased the product at prices ranging from N930 to N1,000 per liter, amid reports of long queues and panic buying.
While no official reasons have been given for the scarcity and hike in the pump prices of petrol and cooking gas, all fingers point to Dangote Refinery.

Breakdown in Dangote

However, findings revealed that the continued shutdown of some critical segments of the mammoth refinery for repairs has led to a drastic drop in supply, which marketers are capitalizing on to raise prices.
According to several energy intelligence platforms, the management of the refinery has been battling to repair the plant’s faulty fuel catalytic cracking unit (gasoline production unit), which is said to be leaking.
Industry watchdog, IIR Energy, declared the problem at the refinery’s Fluidized catalytic cracking unit (RFCCU), which surfaced in April 2025, as a lingering problem.
IIR Energy added that the unit was finally shut down in August for a major repair, forcing the refinery to rely on other refining units like its Crude Distillation Unit (CDU) for the limited fuel it is currently producing.
Reuters also recorded four separate shutdowns of the refinery’s fluidized catalytic cracking unit this year for maintenance, a development it claimed is unusual for a plant of its age. In a report last week, shipping trade analytics firm, Kpler, said the refinery has halved its crude purchases, meaning that production at the facility has to dropped to about 50 percent, which is 300,000 bpd.
Referencing tanker-tracking data and cargo allocation lists, data and energy intelligence platform, Bloomberg, reported that the refinery has been buying less crude lately owing to operational setbacks.
According to Bloomberg, Dangote Refinery is expected to purchase fewer than 300,000 barrels a day of crude in October 2025.
All these points to one conclusion: Dangote Refinery is having technical challenges and is not producing enough to meet up with local demands.
However, the management of the refinery dismissed reports by energy intelligence platforms, which blamed the incessant breakdowns of the facility on its cutting down on crude oil purchases.
According to the company, its decision to cut down crude purchases was a planned response to rising global crude prices.

Crude Price, PENGASSAN

Vice President of Dangote Industries Limited (DIL), Devakumar Edwin, explained the group’s action at the weekend when he took the King of Ekpetiama Kingdom and Chairman of Bayelsa Traditional Rulers Council, Bubaraye Dakolo and some Nigerians on a tour of the facility.
According to Devakumar, no facility of that magnitude can operate at 100 per cent capacity every time.
“No factory runs at 100 per cent every day without issues. What matters is whether any problem affects final production”.
Devakumar also disclosed that over 22 incidents of sabotage had been recorded in the refinery since it began production in 2024.
“We have been under repeated attacks like some people have pointed out earlier. Originally, they said the refinery would not even come up. Then they said it will not be commissioned and start production.
“We went through all those phases. Then they said, okay, we have an issue with PENGASSAN, which is totally false news. Because when we went and had a meeting in Abuja with the ministers and the security agencies, I repeatedly emphasized that we have no issue with PENGASSAN.
“The reorganization we did had nothing to do with PENGASSAN. We started facing incidents of sabotage. We have 22 incidences of sabotage. I have the dates, the unit where it was done, and when it was done. All are documented data. Because you went to the master control room, you know that all the data is completely captured.
“Fortunately for us, it’s a very ultra-modern refinery, thus reducing the impact of any breach on its equipment.
“And in the same way, they were trying to bring down the equipment. Somebody will open a valve to try to see if it will break down.
“So when somebody starts a fire somewhere, the fire protection system is so that it is immediately controlled. The same way, when they try to break down an instrument by opening a valve or adjusting some instruments, some other instrument overrules and stops it.
“But it’s well documented. So we started looking at it, and then we were a bit concerned that somebody can just bring it down and a lot of investment has gone in. That is why we did this massive reorganization,” he said.

Supply Shortfall

BH gathered that fuel importers, who have been supplying the other half of the nation’s fuel needs, have not been able to bridge the gap, thereby leading to a huge shortfall in supply.
Seeing a quick avenue to make more money, all fuel depots and tank farms in the country have increased the prices of petroleum products in their storage tanks, which were purchased several months ago, not minding its crushing effects on consumers.
For instance, depots hiked their prices of petrol from an average of N830 on Monday, October 13, 2025, to about N890 (N50 increase) on Friday, October 17.
While Matrix, Fynefield and Liquid Bulk sold petrol at N900 as of Thursday, October 16, Northwest offered a liter for N895; Sigmund N890; RainOil N890; Pinnacle N885; NIPCO N850 and Aiteo N878.
As a counter measure, Dangote Refinery also adjusted its own ex-depot price to N881, which made filling stations to also adjust their pump prices to reflect the new pricing regime.
Meanwhile, the ex-depot price of Dangote Refinery’s LPG remained unchanged at N715 per kilogramme. The refinery, checks revealed, sell to marketers at N715,000 per metric tonne (MT). With about 1,000 kg in a metric tonne, a kilogramme directly purchased from the refinery comes down to N715 per kg.
On the other hand, A.A. Rano, 11Plc, NIPCO Lagos and A.Y.M Shafa retained the price of their cooking gas at N920 per kilogramme.
However, shylock gas plant owners and retailers have been exploiting the supply gap to sell the product to buyers from N1,200 to N2,200 in Lagos.
While gas stations sell a kilogram of cooking gas for N1,200 to N1,300, neighborhood retailers sell between N1,600 to N2,200.
Meanwhile, petroleum marketers are trading blames on who is responsible for the spike in the prices of petrol and LPG across the country.

Trading Blame

In its defence, the Independent Petroleum Marketers Association of Nigeria (IPMAN), blamed depot owners for the sudden surge in petrol prices.
IPMAN President, Abubakar Shettima, alleged that depot owners increased their prices when they discovered that the Dangote Refinery had stopped selling fuel, except to its partner-stations like MRS.
“These DAPPMAN people are the only one who are selling the product now. But, probably, Dangote will start tomorrow. So, if Dangote starts selling tomorrow, the price will come down. Dangote has not been selling to marketers since all these days.
“You may see their trucks on the road, but the trucks are not enough; marketers still have to support by going there to load.
“And immediately these DAPPMAN people saw that Dangote was not loading, they increased their ex-depot prices.
“That’s just what is happening. But I know these things are temporary, very soon they will go away,” the IPMAN stated.
NNPC Retail also absolved itself of blame, saying it adjusted its pump prices like every other retail outlet because depots increased their gantry rates.
“The ex-depot prices have gone up. You know all the filling stations are retailers. So, when the price goes up ex-depot, there will be an adjustment by the retailers. That’s what has happened and it’s across all the retailers”, said NNPC spokesperson, Andy Odeh.
The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) also absolved itself of blame in the recent surge of the price of LPG, attributing it to temporary supply disruptions and market exploitation by some operators.
Speaking on behalf of NALPGAM, its President, Olatunbosun Oladapo, said there had been no official increment in the price of LPG, blaming the hike on opportunistic marketers taking advantage of supply gaps caused by the recent strike by petroleum workers.
“I sympathise with Nigerians as the President of NALPGAM because we never intended to have a situation like this.
“I must say it categorically that prices of cooking gas have not gone up. No increment has been done officially.
“What is happening is that some marketers are taking advantage of the shortage in supply and the market forces that have increased demand. They are cashing up to make good money, which is wrong.
“We frown at this as an association, and I’m happy that by the grace of God, normalcy will return in the next few days,” the NALPGAM president assured
Efforts to get the reaction of Dangote Group spokesperson, Anthony Cheijina, on the matter were not successful as he failed to pick his calls.