Dangote Halts Fuel Discount Scheme Amid Allegations of Diversion, Fraud

The Dangote Petroleum Refinery and Petrochemicals has suspended its discounted fuel supply scheme after uncovering a widespread fraud involving some of its affiliate marketers and strategic partners. The decision follows internal investigations that revealed that discounted refined petroleum products were being diverted to non-registered marketers for illicit profit.

The scheme, which was designed to provide Dangote’s registered partners with subsidised products to support stable pricing and nationwide availability, was reportedly being exploited. Marketers granted discounted access were found to have sold their Authority to Collect (ATC) tickets to third parties, enabling these unauthorized marketers to lift products directly from the refinery. This abuse allowed them to bypass operational costs and profit from the price gap without engaging in retail distribution as intended.

Dangote Refinery said many of these diverted products were sold at standard market prices, defeating the purpose of the subsidy and destabilising the downstream petroleum market. As a result, the refinery halted the discounted scheme effective July 13, 2025. The move was communicated to partners in a letter signed by the Group Executive Director, Commercial Operations, Fatima Dangote, and obtained by our correspondent on Thursday.

The company expressed concern that some partners were reselling products directly from the refinery at rates below the official gantry price, warning that such practices threaten the long-term viability of its operations. Despite repeated warnings and engagements with partners, the refinery said the malpractice had persisted.

The letter, titled “Suspension of the Strategic Partner Discounted Price,” outlined that while the scheme was launched to ensure affordable fuel access across the country, the selling of ATCs at discounted rates to unauthorized parties had become a serious concern. The refinery said all outstanding Product Release Notes (PRNs) issued before the suspension date would remain valid, and partners who had completed payments would still be eligible for the discounted products.

The company also emphasized that all retail outlets must continue to adhere to recommended pump prices to avoid further distortions in pricing. While the discounted scheme is now on hold, Dangote stated that it is working to restructure the arrangement and exploring alternative incentive schemes for its partners.

Industry expert Olatide Jeremiah confirmed the ongoing malpractice, explaining that some marketers used their refinery access to make quick profits by reselling to other marketers, often at rates just below the market price. He also highlighted that this included misuse of credit-based product allocations meant to boost nationwide supply. These volumes, issued under repayment agreements, were reportedly sold immediately to non-affiliated marketers instead of being distributed through official retail channels.

Market data reviewed by our correspondent shows that non-affiliated marketers have continued to match Dangote’s pricing, even without the benefit of subsidies. Recent checks revealed that five independent depots aligned their ex-depot prices with Dangote’s latest adjustment, now selling at an average of N820 per litre, down from N835 at the beginning of the week.

Although Dangote did not name specific defaulting partners, its list of strategic affiliates includes MRS Oil, Heyden Petroleum, Ardova Plc, Hyde Energy, Optima Energy, Techno Oil, TotalEnergies, Garima Petroleum, Sunbeth Energies, Sobaz Nigeria Ltd, Virgin Forest Energy, Sixxco Oil Ltd, NU Synergy Ltd, and Soroman Nigeria Ltd.

When contacted, Anthony Chiejina, Group Head of Corporate Communications at Dangote Group, declined immediate comment, stating that the company is not engaged in any conflict with its marketers and would provide a formal response in due course.