Nearly two years after the Dangote Petroleum Refinery commenced operations, Nigeria’s quest for energy self-sufficiency faces a paradox: locally produced fuel is leaving the country, only to return at a premium.
Industry data presented at a MEMAN webinar on Thursday by S&P Global Energy official Matthew Tracey-Cook reveals that Nigerian fuel marketers are increasingly routing Dangote-refined products through the offshore ship-to-ship hub in Lome, Togo, before re-importing them into the domestic market, practice that effectively undermines the refinery’s objective of lowering local pump prices.
The circular trade, Tracey-Cook explained, reflects a fundamental misalignment between Nigeria’s domestic pricing structure and international market realities, creating arbitrage opportunities that traders are exploiting.
“Dangote volumes on a coastal basis do arrive back in Lagos from Lomé,” Tracey-Cook told webinar participants, citing waterborne import data that tracked product flows over the past six months.
The figures show that between March and May 2026, Dangote-origin cargoes constituted more than 70 to 80 per cent of all waterborne fuel imports into Nigeria.
“For several months, from March until May, we saw well over 70 to 80 per cent of the volumes that were imported into Nigeria actually originated from Dangote; from their coastal Dangote volumes which were re-imported,” he stated.
The same dynamic, he added, is observable in the diesel segment, with S&P Global data confirming “the increasing importance of the Dangote refinery in terms of product that’s flowing into Nigeria.”
While Dangote has steadily increased its direct coastal deliveries to Nigerian ports, the Lome hub has not only maintained but, in some months, expanded its role. Tracey-Cook noted that volumes handled at Lome in November and December 2025 surpassed 2024 levels, underscoring the hub’s enduring relevance.
The explanation, he said, lies in infrastructure limitations. Many West African ports, including some in Nigeria, lack the capacity to accommodate fully laden medium-range vessels. Lome provides a solution by enabling ship-to-ship transfers onto smaller coaster vessels, ensuring products reach their final destinations efficiently.
“Lomé has become an increasingly important transshipment hub for filling regional shortages across the region… It serves an important purpose, given that many ports in West Africa don’t have the capacity to take a fully laden MR-sized vessel,” he added.
But the infrastructural rationale does not fully account for the re-importation pattern. Tracey-Cook pointed to pricing as the more decisive factor. Since the outbreak of the Middle East crisis, West African gasoline prices have traded at a significant premium to European benchmarks — an anomaly that has reshaped regional trade flows.
“This is really an unusual seasonal trend where gasoline in West Africa is significantly more expensive than it is in Europe right now,” he observed.
Dangote’s petrol pricing, he noted, remains tightly correlated with STS Lome benchmarks, meaning that traders can acquire products at Lome and re-enter the Nigerian market at a profit, effectively circumventing any domestic price advantage the refinery might offer.
Tracey-Cook described the relationship between Dangote and Lome as the foundation of a new regional supply architecture, one that mirrors the competitive dynamics of the Mediterranean market, where multiple refineries operate in an interconnected trading environment.
“These two locations, the FOB Dangote market and also the STS Lomé market, are the two largest and most important regional hubs of supply in the region as a whole. You can, in a way, kind of compare it to the Mediterranean market, where you have multiple refineries, multiple sources of supply… And so that’s kind of what we see as a possibility in terms of development of this market,” he said.
The geopolitical context has further elevated Dangote’s standing. With Europe having relied on the Persian Gulf for more than half its jet fuel requirements before the US-Iran war, the supply disruption sent benchmark prices soaring past $1,800 per metric tonne.
“Europe before the war was more than 50 per cent reliant on jet fuel from inside the Persian Gulf. And when that supply was cut off, benchmark prices spiked to well over $1,800 per metric tonne,” Tracey-Cook noted.
“What we saw in the months after the war broke out was an increasing flow of product from the US, but also a large flow of product from Dangote. We actually saw in May Dangote being the largest single exporter of jet fuel globally in terms of refined product capacity,” he added.
Between April and June 2026, Dangote recorded its highest export volumes outside West Africa, with cargoes reaching the United Kingdom, the Netherlands, and South Africa.
The current trading patterns lend credence to complaints Nigerian marketers first voiced in November 2025. The Depot and Petroleum Product Marketers Association of Nigeria and the Petroleum Products Retail Outlet Owners Association of Nigeria had then alleged that Dangote was offering petrol to international buyers at N65 per litre below the price quoted to domestic off-takers.
“Dangote is selling to international traders at N65 lower than what he offers in Nigeria. How is it possible for some of our members to buy from someone who bought from Dangote? In some instances, we were able to buy from those people and still bring it to Nigeria. They will take the product to Lomé, claiming that they are buying large quantities,” a DAPPMAN official had stated.
Dangote has consistently refuted these claims, maintaining that its pricing is uniform across markets.
Nevertheless, Tracey-Cook’s data confirms that substantial Dangote volumes are flowing through Lome and back into Nigeria, raising questions about whether the refinery’s domestic pricing model is effectively serving the Nigerian consumer , or inadvertently fuelling a trade cycle that keeps local fuel costs elevated.
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