Aliko Dangote's refinery cuts off petrol to importers it accuses of blending its fuel

Africa's richest man, Aliko Dangote's refinery has stopped selling petrol to major marketers who import fuel, following through on a warning it issued last month that it would not supply companies it accuses of blending its product with lower-grade imports, Punch reported on Tuesday.

"We are not selling petrol to those who are importing, since they are trying to blend our high-quality products with their ultra-low-quality imported products," a refinery official told the paper, speaking anonymously because he was not authorized to comment. A second official said the plant now prefers to sell to members of the Independent Petroleum Marketers Association of Nigeria and other buyers "not known for importing."

The refinery had set out its position publicly last month. "It is difficult to understand why we would invest heavily in producing high-quality petroleum products for Nigerians, only for those products to be mixed with imported products of uncertain quality and the resulting product to be associated with the refinery," it said in a statement, adding that blending made it impossible to distinguish fuel it supplied directly from product handled by third parties.

The importers' reading is different. Marketers who spoke to Punch on condition of anonymity said the restriction was a move to end petrol imports altogether and challenged the refinery to produce evidence that imported fuel fails Nigerian standards. "We know what Dangote is trying to do. He is just trying to block imports," one said. Another argued that a seller cannot dictate what a buyer does with the product, likening it to a motorist topping up at a TotalEnergies station and then at an MRS station down the road. "Can TotalEnergies say you should not mix its petrol with MRS petrol? No, it can't."

The cutoff explains a court case. Punch reported that some marketers went to court to compel the Nigerian Midstream and Downstream Petroleum Regulatory Authority to keep issuing import licences, fearing they would be left without supply once the refinery stopped selling to them. The marketers also argued the federal government has a duty to secure supply and protect consumers, and that imports remain necessary whenever domestic output dips.

Independent marketers, the refinery's preferred customers, were careful not to take sides. "We buy our product anywhere we feel it is cheap," said IPMAN national vice chairman Hamed Fashola, adding that his members source from both the refinery and importers. National publicity secretary Chinedu Ukadike said he could not confirm whether blending was happening but that the refinery was "in the best position" to decide how to discourage adulteration, and that independents were not importing "yet."

The dispute sits inside a larger one. Since the 650,000-barrel plant reached full capacity in February, Dangote has argued that Nigeria no longer needs petrol imports and that licences for them undermine local refining; importers and some regulators have argued that a single domestic supplier should not be allowed to become the only one. Nigeria's petrol exports to Europe rose to 130,000 barrels a day in the second quarter, almost entirely from the Lekki plant, while importers continued to bring in cargoes that, in Q2, still exceeded exports in value.

The timing adds pressure. The refinery's N2.15 trillion ($1.6 billion) public offer closes on Oct. 13, pitched to 10 million retail investors on the promise of a dominant position in Nigerian fuel; a supply standoff with the country's largest marketers is the kind of headline that offer did not need. Dangote has said he will cancel a $10 billion steel project to concentrate on power and refining, and that the plant will double to 1.4 million barrels a day by 2029. Whether the marketers he is now refusing to supply will be buying from him then, or from a tanker, is the question the court case is meant to answer.