Stakeholders in Nigeria’s downstream petroleum sector have confirmed the collapse of a proposed fuel supply arrangement between the Dangote Petroleum Refinery and independent petroleum marketers, amid a resurgence in the importation of Premium Motor Spirit (PMS), also known as petrol.

Speaking on the development, industry sources told that negotiations between the $20 billion Dangote Refinery and marketers failed over pricing disagreements, payment terms and concerns about supply sustainability, prompting marketers to resort once again to imported products.

According to the sources, the refinery had proposed to supply PMS and other petroleum products directly to marketers, following its gradual ramp-up of operations.

However, marketers reportedly insisted on competitive pricing comparable to imported fuel, flexible credit terms and clear guarantees on volume consistency.

A senior official of the Independent Petroleum Marketers Association of Nigeria (IPMAN), who spoke on condition of anonymity, said the talks broke down after several meetings failed to yield a mutually acceptable framework.

“We were open to lifting products from the Dangote refinery, but the commercial terms were not favourable enough for many marketers. Importation, though expensive, still gives some operators flexibility in sourcing and pricing,” the official said.

Sources gathered that with the talks stalled, fuel importation has increased in recent weeks, with marketers bringing in PMS to meet domestic demand, especially in major cities such as Lagos, Abuja and Port Harcourt.

Another downstream operator noted that uncertainty surrounding domestic supply logistics also played a role in the collapse of the deal.

“Beyond price, there are issues of evacuation, distribution costs and access to loading infrastructure. Many marketers are still adjusting to how lifting from a single mega-refinery would work in practice,” the operator said.

Efforts to obtain official comments from the management of Dangote Petroleum Refinery were unsuccessful as of the time of filing this report.

However, the refinery has previously maintained that it is committed to supplying high-quality, locally refined products to the Nigerian market and reducing the country’s dependence on imports.

Analysts say the renewed surge in fuel imports underscores lingering structural challenges in Nigeria’s downstream sector, despite the operational commencement of Africa’s largest refinery.

An energy analyst, Mr Tunde Adebayo, told sources that while the Dangote refinery represents a major milestone, market forces will ultimately determine patronage.

“Local refining alone does not automatically end imports. Pricing, efficiency, logistics and trust between suppliers and marketers are critical. Until these align, imports will continue,” Adebayo said.

He added that sustained engagement between the refinery, marketers and regulators would be required to achieve long-term stability and lower fuel import volumes.

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has consistently stated that importation remains permissible under the Petroleum Industry Act (PIA), provided quality and regulatory standards are met.

As negotiations remain stalled, consumers are watching closely to see whether the collapse of the deal and increased imports will have implications for fuel availability and pump prices in the coming weeks.