Dangote’s fuel supply racket forces suspension of refinery’s discount scheme over marketer abuse and subsidy diversion, with operations now under review

Dangote’s fuel supply racket was uncovered at the company’s Lekki refinery and it has triggered the suspension of its discounted product scheme, following revelations that some affiliate marketers diverted subsidised fuel for illicit resale.

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This development came to light after internal investigations revealed that marketers granted access to discounted refined petroleum products had been bypassing the authorised distribution chain, selling to unregistered third-party dealers.

The discounted scheme, initially launched to ease pump prices and support affiliate marketers’ margins in the face of competition from importers, has now been put on hold.

According to the refinery’s management, marketers exploited the system by selling fuel directly from Dangote’s tarmac at rates under the official gantry price.

These unauthorised trades, it said, were not only in breach of strategic agreements but also disrupted national supply chains and caused artificial scarcity.

A letter dated 13th July 2025, signed by Group Executive Director for Commercial Operations, Fatima Dangote, confirmed the suspension of the scheme.

“In our drive to ensure the distribution and retail sale of DPRP refined petroleum products across your service stations nationwide, DPRP commenced the strategic partnership scheme with the sole aim of ensuring consumers nationwide have access to affordable and clean petroleum products,” the letter read.

“Unfortunately, over the last few months, DPRP has been receiving unprecedented complaints of Strategic Partners selling their ATCs at the refinery (Tarmac) below the prevailing PMS gantry product price… It has become an area of grave concern.”

Despite repeated engagements with marketers, the company noted that violations persisted, prompting what it described as a necessary reset.

“All existing PRNs at partner prices will remain valid for loading,” the letter added, “and any partner who completed payment before the effective date will still enjoy the agreed discount.”

An industry expert, *Olatide Jeremiah*, confirmed the malpractice:

“It is the affiliated marketers who hold the loading tickets that are selling to unregistered marketers at a slight profit. This abuse undermines Dangote’s objective of nationwide affordability.”

Jeremiah explained that the differential, sometimes as little as ₦4 per litre, incentivised marketers to offload products to depot owners or importing rivals rather than retail outlets, bypassing legitimate operational costs.

“In addition,” he noted, “Dangote also offered volume-backed credit arrangements to encourage stock circulation. Some marketers abused that too by selling diverted volumes for instant cash.”

While the refinery stopped short of naming erring companies, known partners include MRS Oil, Ardova Plc, Heyden Petroleum, TotalEnergies, and Optima Energy, among others.

Market data reviewed by petroleumprice.ng shows that even non-affiliated marketers—those without access to Dangote’s discounts—now sell fuel at similar prices as registered ones, indicating how widespread the distortions have become.

Last week, five major private depots aligned their prices with Dangote’s latest adjustments, selling at an average of ₦820 per litre—₦15 lower than the rate at the start of the week.

Despite the temporary halt, the company insists that its strategic partnership model remains vital.

“We are working judiciously to restructure the scheme,” the management said. “New incentive models will be communicated in due course.”

Group Head of Corporate Communications, Anthony Chiejina, told our correspondent that Dangote remains committed to transparency.

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“There is no quarrel with the marketers,” he said. “But we are putting things in order to ensure the integrity of our operations.”