The Dangote Refinery has announced a new 10-day credit facility for petrol station owners and dealers, backed by a bank guarantee, alongside free direct delivery and other incentives, in a move set to further reshape competition in Nigeria’s downstream petroleum sector.
The offer was disclosed in a statement posted on the company’s official X (formerly Twitter) handle on Tuesday, inviting petrol station operators nationwide to register to benefit from the arrangement.
According to the statement, participating dealers will have access to “a 10-day credit facility backed by a bank guarantee,” with a minimum order requirement of 5,000 litres. The company also confirmed that free direct delivery to stations will commence shortly.
“Our free direct delivery service will commence soon,” the statement said, adding that the supply arrangement is open to “all petrol station owners and dealers.”
The Dangote Group urged operators to register their outlets to access the scheme, noting that fuel supplied under the arrangement would be sold at a gantry price of ₦699 per litre.
“Register your petrol stations today to benefit from our competitive gantry price,” the statement read.
The announcement follows a recent downward review of petrol prices by the Dangote Petroleum Refinery, which cut its ex-depot price from ₦828 to ₦699 per litre — a reduction of ₦129 or about 15.6 per cent.
An official of the refinery, who spoke on condition of anonymity, confirmed that the new price took effect on December 11, 2025, marking the 20th petrol price adjustment by the refinery this year.
Why Dangote Is Extending Credit Now
The introduction of a credit-backed supply model represents a strategic escalation in Dangote’s push to dominate Nigeria’s liberalised downstream market. By offering dealers a short-term credit window, free logistics, and a sharply lower gantry price, the refinery is directly addressing two of the biggest constraints facing independent marketers: working capital pressure and high distribution costs.
For many station owners, access to affordable credit has historically been limited, forcing them to rely on cash-and-carry purchases or expensive short-term borrowing. Dangote’s model effectively substitutes balance-sheet strength and bank guarantees for cash upfront, improving liquidity at the retail level.
Impact Analysis: What This Means for Nigeria’s Downstream Sector
The move is likely to have far-reaching implications across the downstream value chain, particularly against the backdrop of an intensifying price war.
Pressure on Importers and Marketers
Dangote’s ₦699 per litre gantry price, combined with credit terms and free delivery, significantly undercuts the economics of imported petrol. Importers face exposure to foreign exchange volatility, port charges, demurrage, financing costs, and regulatory fees — all of which are largely absent in a domestically refined, naira-priced supply model.
As a result, independent importers may find it increasingly difficult to compete unless global prices fall sharply or policy interventions shift in their favour. Smaller marketers without access to similar credit terms could also be squeezed out.
Escalation of the Price War
The downstream sector is already experiencing intense price competition, with pump prices falling sharply from highs above ₦1,200 per litre earlier in the year. Dangote’s latest move deepens the price war by transferring margin pressure from the refinery level to importers and retailers.
While consumers stand to benefit from lower pump prices in the short term, sustained margin compression raises questions about the long-term viability of multiple players in the market.
Renewed Debate Over Fuel Imports
Dangote’s aggressive pricing and credit strategy is likely to reignite calls from the refinery and its supporters for restrictions — or an outright ban — on petrol imports. Proponents argue that protecting domestic refining capacity would stabilise prices, conserve foreign exchange, and support industrial policy.
Opponents counter that import bans risk entrenching a dominant supplier, reducing competition, and creating new pricing vulnerabilities if domestic supply disruptions occur.
Shift in Market Power
By combining pricing, logistics, and financing into a single supply proposition, Dangote is effectively redefining competition in the downstream sector. Market power is shifting away from traders and importers toward integrated refiners with scale, infrastructure, and access to finance.
The Bigger Picture
Dangote’s 10-day credit facility underscores how Nigeria’s post-subsidy, liberalised fuel market is rapidly evolving. Competition is no longer centred solely on pump prices but increasingly on access to capital, logistics efficiency, and balance-sheet strength.
For petrol station owners, the offer provides short-term relief and improved cash flow. For the broader industry, it signals a decisive new phase in the struggle between domestic refining and fuel imports — a contest that will shape pricing, policy, and market structure well into 2026.
Is Dangote Refinery’s Strategy Anti-Competitive?
The Credit Offered
On its own, offering credit to customers is not inherently anti-competitive. In functioning markets, supplier credit can enhance efficiency, reduce transaction frictions, and ease liquidity constraints for downstream operators. However, the competition concern here does not arise from credit in isolation, but from bundling.
Dangote Refinery is not merely extending short-term financing to petrol stations. The 10-day credit facility is bundled with sharply reduced gantry prices, free direct delivery, and supply certainty, creating an integrated commercial package that rivals—particularly import-dependent marketers—are structurally unable to replicate. When credit is bundled in this way by a dominant player with superior financial capacity, it can move beyond a neutral commercial incentive and function as a market foreclosure mechanism.
By easing working-capital pressures for petrol station owners, the bundled credit effectively anchors retailers to Dangote’s supply chain at a moment when alternative suppliers face significantly higher costs. Importers contend with foreign exchange exposure, shipping and port charges, financing costs, and regulatory fees. Replicating a 10-day credit window together with low pricing and free logistics would, for many competitors, be commercially impossible.
In competition-law analysis, this form of bundling raises the risk of exclusionary conduct. While each component—credit, logistics support, or competitive pricing—may be lawful on its own, their combined deployment can materially reduce customer switching, reinforce dependency, and weaken alternative supply channels without reflecting superior efficiency.
The Price Cuts
The antitrust concern is intensified by the scale and persistence of Dangote’s price reductions. The refinery’s decision to cut ex-depot petrol prices to ₦699 per litre follows repeated downward adjustments and comes against the backdrop of a public admission by Aliko Dangote that the refinery is currently operating at a loss.
Sustained pricing below an economically sustainable level by a dominant, vertically integrated firm aligns closely with the classical definition of predatory pricing. The competition risk is not the immediate benefit of lower prices to consumers, but the strategic pattern: absorbing short-term losses using superior financial muscle, undermining rivals that cannot sustain comparable losses, and potentially recouping those losses once competition has been eliminated.
Importers and independent marketers, already exposed to foreign exchange volatility and high logistics costs, are structurally ill-equipped to withstand prolonged loss-led pricing. When below-cost pricing is bundled with credit and free logistics, the cumulative foreclosure effect becomes stronger and more difficult for rivals to counter through normal competitive means.
In jurisdictions with robust competition enforcement, regulators would typically scrutinise whether such pricing reflects genuine cost efficiencies or deliberate loss-leading designed to foreclose the market. Where bundling, loss-making prices, and dominance coincide, the threshold for regulatory intervention is substantially lower.
Potential Impact on Consumers
In the short term, consumers are clear beneficiaries of Dangote Refinery’s strategy. Lower gantry prices translate into reduced pump prices, easing transport costs, household energy expenses, and inflationary pressure across the economy. Improved supply certainty may also reduce fuel scarcity, queues, and price dispersion across regions.
However, competition law is concerned not only with immediate price effects but with long-term consumer welfare. If sustained loss-making pricing and bundled incentives drive competing importers and marketers out of the market, consumers could ultimately face fewer choices, reduced supply resilience, and heightened vulnerability to future price increases. Once competitive constraints weaken, a dominant supplier may have greater latitude to raise prices above competitive levels or alter supply terms.
There is also a systemic risk. Heavy retailer dependence on a single supplier’s credit and logistics ecosystem could magnify the impact of any operational disruption, regulatory dispute, or supply shock. In such a scenario, consumers would bear the cost through sudden price spikes or fuel shortages.
From this perspective, the immediate consumer gains from lower petrol prices must be weighed against the longer-term risk of market concentration and reduced competitive discipline—precisely the trade-off that competition authorities are designed to assess.
Structural Risk to the Downstream Market
For Nigeria’s downstream petroleum sector, the risk is ultimately structural rather than immediate. Petrol station owners and consumers may benefit in the short term from lower prices and improved cash flow. However, widespread reliance on a single supplier’s bundled pricing, logistics, and credit ecosystem could reduce supply diversity, entrench dominance, and expose consumers to future price increases once competitive constraints weaken.
