Nigeria’s downstream petroleum sector is facing a major shift as members of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) raise concerns over persistently low activity levels across their depots, especially in Apapa, Lagos. Industry players warn that if the situation continues without clear policy direction and market adjustments, multi-million-dollar depot investments could become idle, putting thousands of direct and indirect jobs at risk and affecting the wider economy.
A recent visit to parts of the Apapa petroleum depot axis, including routes linking Aiteo, NIPCO and Hensmor facilities, showed a sharp contrast to what used to be a very busy environment. Tanker traffic was thin, with only a few trucks moving in and out. Gantries that once operated round the clock now appeared quiet, with no long queues of fuel tankers, drivers, motor boys and food vendors that typically defined the area.
Some workers and management staff, who spoke on condition of anonymity, expressed fear about job security. According to a senior staff member at one of the depots, the current market reality could force companies to cut costs if the low activity persists. He explained that firms with diversified investments such as gas, hospitality or other non-fuel businesses may be better positioned to survive, while those relying mainly on depot operations could struggle.
He blamed the downturn largely on changes in fuel distribution patterns following the entry of the Dangote Petroleum Refinery into the domestic market. The refinery’s decision to sell products directly, combined with intense price competition and logistical challenges, has significantly altered the traditional supply chain that depot owners depended on for years. According to him, the situation worsened during the recent price competition between Dangote Refinery and fuel marketers, which squeezed margins and reduced volumes moving through private depots.
Confirming these developments, DAPPMAN Executive Secretary, Mr. Olufemi Adewole, said the low activity at depots reflects a broader shift in how petroleum products are now sourced. He explained that many DAPPMAN members are increasingly focusing on supplying their own retail outlets rather than selling to independent marketers. According to him, many members of the Independent Petroleum Marketers Association of Nigeria (IPMAN), who previously bought products from depots, now source directly from the Dangote Refinery.
Adewole cited examples of large marketers with extensive retail networks, such as NIPCO, Rain Oil, Matrix, BOVAS and others, each operating over 200 petrol stations nationwide. With such networks, these companies are able to channel available supplies directly to their outlets. He noted that marketers with fewer stations are more exposed, as the loss of IPMAN patronage significantly affects their depot throughput.
Industry data supports this shift. IPMAN has reported a sharp decline in petroleum product imports, driven largely by increased domestic supply from the Dangote Refinery. Central Bank figures show that fuel imports dropped by about 54 per cent, from $14.58 billion in one period to $6.71 billion in a later period, reflecting growing local refining capacity.
Further data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) showed that the Dangote Refinery supplied an average of 32.01 million litres of petrol per day in one recent month, up from 23.52 million litres daily in the previous month. Despite the increase, the refinery’s output was still below its planned domestic supply target of 50 million litres per day. The refinery also supplied an average of 5.783 million litres of diesel daily during the same period.
At the same time, Nigeria’s daily petrol consumption rose to an average of 63.7 million litres, compared to lower figures recorded in earlier months. While domestic refineries supplied about 32 million litres daily, imports still accounted for roughly 42.2 million litres per day, showing that the market remains in transition.
Despite current challenges, Adewole said DAPPMAN members remain committed to the business and open to engagement. He noted that the association is willing to work with Dangote Refinery, but added that collaboration depends on mutual interest. He acknowledged the refinery as the largest single-train refinery in the world and described it as a source of national pride.
DAPPMAN Chairman, Mrs. Moroti Adedoyin-Adeyinka, also addressed the issue during a virtual briefing. She said the entry of major players like Dangote Refinery naturally disrupted market share and pricing structures. According to her, such turbulence is expected during periods of major industry transition. She added that DAPPMAN members currently supply about 60 per cent of petroleum products consumed nationwide and aim to sustain this contribution to support energy security.
She described the period as a challenging but necessary phase shaped by subsidy removal, the Petroleum Industry Act and stronger competition. According to her, these reforms have created pressure but are part of a broader restructuring of Nigeria’s downstream oil and gas sector.
