Nigeria is confronting an awkward question in its fuel market.
The landed cost of imported petrol rose to ₦1,223.32 per litre on July 29, while Dangote Petroleum Refinery offered petrol at a ₦1,215 gantry price, according to pricing data from the Major Energies Marketers Association of Nigeria.
That leaves imported petrol about ₦8.32 per litre more expensive, a gap of less than 1%.
For the Independent Petroleum Marketers Association of Nigeria, the numbers strengthen an argument it has made repeatedly: why should Africa’s largest oil producer spend foreign exchange importing petrol when a 650,000-barrel-per-day refinery is operating in Lagos?
But the answer is not as straightforward as the price comparison suggests.
Nigeria’s petrol imports rose sharply only a month earlier because domestic supply fell. In June, average daily imports jumped from 5.9 million litres in May to 18.1 million litres, while domestic petrol receipts declined from 41.5 million litres to 32.5 million litres per day, according to NMDPRA data. Total supply rose to 50.6 million litres per day, while estimated consumption averaged 47.4 million litres.
That means Nigeria is trying to solve two different problems at once: reduce dependence on imported fuel without becoming dependent on a domestic supplier that cannot always provide the entire market.
The ₦8.32 gap raises a bigger question than which fuel is cheaper today.
Does Nigeria still need petrol imports at all?
If Dangote Is Cheaper, Why Are Marketers Still Importing Petrol?
Price is only one reason marketers decide where to buy fuel.
Availability matters just as much.
NMDPRA’s June numbers show why. Domestic PMS receipts dropped by 21.7% from May to June, while imports increased by 206.8%. The imported volume helped raise overall receipts even as local supply weakened.
Imports accounted for roughly 36% of total petrol receipts in June, based on the regulator’s figures.
That is a sizeable share of supply to remove suddenly.
It also shows the distinction between refinery capacity and actual products reaching the market. Dangote’s refinery has the capacity to process 650,000 barrels of crude per day, but that figure does not mean 650,000 barrels of petrol are produced daily.
A refinery produces several products, including petrol, diesel, aviation fuel and other petroleum products. Actual PMS output also depends on crude intake, unit utilisation, maintenance, product yields and evacuation.
So the better question is not whether Dangote is large enough on paper.
It is whether domestic refiners can supply Nigerian demand consistently, every day and across changing operating conditions.
June suggests the market has not reached that point yet.
Is the ₦8.32 Difference Really Enough to Change Import Policy?
This is where the latest price comparison requires caution.
MEMAN’s reported ₦1,223.32 landed cost represents the cost of imported petrol arriving in Nigeria.
Dangote’s ₦1,215 gantry price reflects product supplied at its loading point and includes specified regulatory charges, according to the figures reported by The Punch. Its coastal price was lower at ₦1,195.
The two figures are useful for showing competitive pressure, but they do not represent the final price motorists pay.
Fuel must still move through storage, distribution and transportation systems. Marketers also carry financing and operating costs, while geography affects how much it costs to move petrol from Lagos or coastal depots to filling stations hundreds of kilometres away.
An ₦8.32 advantage at one point in the supply chain can therefore narrow, widen or disappear before a litre reaches a motorist.
More importantly, the spread represents only about 0.68% of the reported import landed cost.
That is too narrow to assume the economics have permanently shifted in favour of local supply.
Exchange rates, crude prices, freight rates and international refining margins can move by considerably more than that.
Could Stopping Imports Create Another Problem?
This is the uncomfortable part of the debate.
IPMAN argues that petrol imports put pressure on foreign exchange and weaken the economics of Nigerian refining investments.
That argument has merit. A country that produces crude oil but imports large quantities of finished petroleum products effectively sends crude abroad and pays again to bring refined products back.
A reliable domestic refining industry should reduce that exposure.
But shutting imports because one refinery is currently cheaper presents another risk: market concentration.
If a single supplier becomes responsible for an overwhelming share of Nigeria’s petrol market, marketers could have fewer alternative sources when that refinery reduces production, undergoes maintenance or changes prices.
June provides an example of why diversification matters. When domestic petrol receipts fell by nine million litres per day, imports rose by 12.2 million litres per day and helped keep total supply above consumption. PMS stock sufficiency also improved from 16.2 days in May to 19.7 days in June.
That does not prove Nigeria should permanently depend on imports.
It shows that imports can function as a supply buffer while the domestic refining system is still developing.
The danger for policymakers is replacing one form of dependence with another.
Nigeria spent decades depending heavily on foreign refineries. It should not reduce that exposure only to create excessive dependence on one local refinery.
Are Imports Competing With Dangote or Filling Supply Gaps?
That distinction could determine the future of Nigeria’s downstream market.
Imports make economic sense when domestic production cannot meet demand or when an overseas supplier can deliver petrol more competitively.
The argument becomes harder to defend when domestic refiners have available product at a lower price and imported cargoes still enter the market.
IPMAN’s criticism focuses on precisely that scenario.
But June’s supply data shows that Nigeria still experienced periods when domestic petrol receipts were below market needs. Domestic supply averaged 32.5 million litres per day against consumption of 47.4 million litres per day, leaving a gap of nearly 15 million litres daily before inventories and imports are considered.
That does not mean the same gap existed throughout July. It does mean policymakers need more than nameplate refinery capacity before concluding that imports have become unnecessary.
The crucial data should be straightforward: how much petrol domestic refiners can supply, how reliably they can supply it and whether those volumes meet demand.
When the answer is consistently yes, the economic case for large-scale imports becomes much weaker.
What Is Driving Imported Petrol Above Dangote’s Price?
The current pricing shift is also being driven by forces outside Nigeria.
The MEMAN figures cited in the report put Brent crude around $90 per barrel during the review period. Higher crude prices feed directly into the cost of refined petroleum products.
Importers face another layer of exposure.
They must purchase finished petrol in international markets and deal with freight, insurance, financing and exchange-rate risks before the product reaches Nigeria.
The naira averaged ₦1,367.03 to the dollar during the review period, according to the MEMAN data cited by The Punch.
For a domestic refinery, crude remains a major cost and international prices still matter. But producing finished fuel inside Nigeria can remove part of the freight and supply-chain exposure attached to bringing the same product from an overseas refinery.
That is one of the central economic arguments behind local refining.
Yet it does not guarantee that Nigerian petrol will always be cheaper. A stronger naira, falling international fuel prices or aggressive pricing from overseas refiners could restore the import advantage.
Will Cheaper Dangote Petrol Mean Lower Pump Prices?
Not automatically.
The report puts retail petrol around ₦1,250 to ₦1,300 per litre in parts of Lagos and Ogun, with higher prices in locations farther from major supply hubs.
Depot prices also varied across Lagos, Port Harcourt, Calabar and Warri.
That variation shows why refinery price is only one component of what motorists eventually pay.
A sustained fall in ex-refinery prices can put downward pressure on retail prices, particularly when marketers compete for customers. But transport costs, depot margins, financing and distribution inefficiencies still matter.
That means local refining will have to deliver more than petrol that is occasionally cheaper than imports.
It must deliver reliable volume, competitive pricing and lower distribution costs if consumers are to feel the full benefit.
So Does Nigeria Still Need Imported Petrol?
For now, the evidence suggests it does, but increasingly as a backup and competitive supply source rather than the foundation of the market.
That distinction matters.
Imported petrol costing ₦1,223.32 against Dangote’s ₦1,215 does not, by itself, make every import irrational. The price difference is small, and Nigeria was still using imported cargoes to compensate for weaker domestic receipts only weeks earlier.
But the direction of the market is clear.
The more consistently Nigerian refineries can meet demand at prices below import parity, the harder it becomes to justify importing large quantities of petrol.
The test should therefore not be whether imports are banned.
It should be whether they are still economically necessary.
When domestic supply can reliably cover consumption, maintain adequate reserves and withstand refinery outages without shortages, imported petrol should increasingly become the exception.
Until then, Nigeria’s challenge is to reduce import dependence without sacrificing supply security or competition.
The fact that Dangote fuel is now cheaper is significant.
The more important milestone will come when Nigeria no longer needs imported petrol to keep its filling stations supplied.