Landmark offtake agreement aims to secure nationwide supply, curb volatility, and position Nigeria as a net fuel exporter..
The Dangote Petroleum Refinery has signed a major offtake agreement with 12 leading petroleum marketing companies to distribute between 60 million and 65 million litres of Premium Motor Spirit (petrol) daily across Nigeria, a move widely seen as a turning point in the country’s fuel supply chain.
President of the Dangote Group, Aliko Dangote, disclosed the development in Lagos, describing the arrangement as a structured framework that guarantees consistent nationwide distribution while allowing surplus production to be exported.
“We have agreed an offtake framework to supply up to 65 million litres daily for the domestic market. Any surplus, estimated at between 15 and 20 million litres, will be exported,” Dangote said.
A Supply Shift with National Impact
Nigeria’s current daily petrol consumption is estimated at between 50 million and 60 million litres. The new framework means the refinery alone could comfortably meet domestic demand, with additional volumes available for export once local supply obligations are fulfilled.
At full implementation, the refinery is projected to release between 1.8 billion and over 2 billion litres of petrol monthly, depending on output levels and the number of days in each month.
Industry observers say this marks a decisive shift in Nigeria’s downstream petroleum sector, from chronic import dependence to structured domestic production and distribution.
Building on Earlier Stabilisation Efforts
The agreement builds on an earlier understanding reached in October 2025 between the refinery and downstream operators aimed at easing supply disruptions and moderating pump price volatility.
At the time, independent marketers revealed that the refinery had targeted the release of up to 600 million litres of petrol monthly into the domestic market to address persistent shortages and rising costs.
Under the newly endorsed arrangement, distribution responsibilities will be handled by selected marketers nationwide, in a system approved by the Nigerian Midstream and Downstream Petroleum Regulatory Authority. The structure is designed to streamline logistics, reduce hoarding, and discourage speculative pricing.
The 12 Marketers Driving Distribution
The participating companies include:
- MRS Oil Nigeria Plc
- Nigerian National Petroleum Company Limited Retail
- 11 Plc
- TotalEnergies Marketing Nigeria
- Rainoil Limited
- Northwest Petroleum & Gas Company Limited
- Ardova Plc
- Bovas & Company Limited
- AA Rano Nigeria Limited
- AYM Shafa Limited
- Conoil Plc
- Masters Energy
Together, they are expected to ensure comprehensive national coverage and prevent regional supply imbalances.
Ending Decades of Import Dependence
For decades, Africa’s largest oil producer relied heavily on imported refined products, leaving the economy vulnerable to exchange rate swings, global supply disruptions, and recurring fuel scarcity.
The refinery’s management says the structured offtake model will not only stabilise domestic supply but also conserve foreign exchange by drastically cutting petrol imports. Exporting 15–20 million litres daily could further improve Nigeria’s trade balance and support external reserves.
The Group Chief Executive Officer of the Nigerian National Petroleum Company Limited, Bayo Bashir Ojulari, recently described the refinery as a transformative national asset capable of redefining Nigeria’s energy security framework.
Speaking after a facility tour, Ojulari noted that the plant designed for 650,000 barrels per day had exceeded expectations.
“What we saw live today was 661,000 barrels per day. These are live parameters, not projections,” he said, underscoring the refinery’s scale and operational capacity.
A Post-Subsidy Era Reality
Nigeria’s downstream oil sector has undergone sweeping reforms following deregulation and the removal of fuel subsidies under President Bola Tinubu. The new market-driven framework places greater emphasis on efficiency, competition, and domestic refining capacity.
The Dangote refinery, the largest in Africa, is widely viewed as central to that transition. If the structured distribution model performs as planned, it could mark the beginning of a more predictable fuel supply chain one less prone to scarcity cycles and price shocks.
With daily domestic demand now potentially covered by local refining, Nigeria may be edging closer to a long-awaited milestone: energy self-sufficiency backed by export capacity.
Whether this framework delivers lasting price stability and eliminates supply disruptions will become clearer in the months ahead. For now, the deal signals one of the boldest shifts yet in Nigeria’s petroleum landscape.
