Nigeria’s deregulated petrol market means distribution choices now show up more directly in the pump price. In a February 5, 2026 statement, Dangote Refinery warned that moving PMS through “coastal logistics” rather than its gantry (truck loading) route could add about ₦75 per litre—a premium it says could push retail prices “close to ₦1,000/litre” if marketers pass the cost through to consumers.
The refinery’s position is that gantry evacuation is the cheapest path because it avoids port charges, maritime levies and vessel-related costs that do not improve value for end users.
Marketers and depot operators, meanwhile, argue coastal evacuation supports existing depot infrastructure and can improve regional supply balance—though it introduces extra layers of fees, handling, and waiting time.
What follows is a detailed breakdown of what “coastal logistics” means in the Nigerian downstream context, where the extra ₦75/litre can come from, and how that can translate into a near-₦1,000/litre outcome.
1) What Dangote Refinery is claiming—and why it matters
In its “Six things to know…” message (reported by Punch), Dangote said:
- It has a gantry facility with 91 loading bays and capacity to load up to 2,900 tankers daily, evacuating over 50 million litres of PMS and 14 million litres of dieselthrough continuous operations.
- Gantry loading is “most cost-efficient” because it eliminates “port charges, maritime levies and vessel-related costs.”
- Marketers may choose either gantry or coastal loading; however, coastal logistics could add about ₦75/litre, potentially pushing pump prices near ₦1,000/litre if passed through.
- Dangote estimates that if coastal logistics became the dominant method, the added cost could be ~₦1.752 trillion annually (based on its cited daily consumption figures).
This warning matters because logistics is now one of the largest “swing factors” in the post-subsidy PMS price: crude input, FX, and refining margins set a base; logistics determines whether that base is delivered cheaply—or with layers of cost that compound.
2) What “coastal logistics” means in practice
In the PMS supply chain, “coastal logistics” typically refers to evacuating product from the refinery area and moving it by sea to coastal depots/jetties (or via offshore loading systems such as Single Point Mooring, depending on the setup), then distributing inland by truck from those depots.
A simplified comparison:
A) Gantry-to-truck route (shortest chain)
Refinery gantry → tanker trucks → retail stations / bulk users
- Fewer handling steps
- Mostly road transport costs (fuel/maintenance, driver, insurance, security, time delays)
- Less exposure to port tariffs, marine service charges, and vessel delays
B) Coastal-to-depot route (longer chain)
Refinery coastal loading → vessel/shuttle → port/jetty discharge → depot storage → depot loading → trucks → retail
- Additional handling and storage steps
- Exposure to port and marine service charges
- Higher time risk (berthing delays, demurrage, weather downtime)
- Requires functioning depots/jetties and safe navigation/terminal operations
Dangote’s argument is that these extra steps create costs that do not increase the volume or quality of PMS—they simply raise the delivered cost.
3) Where an extra ₦75/litre can come from (cost stack)
Dangote’s ₦75/litre figure is best understood as the combined effect of several cost buckets that are either absent or materially smaller when lifting product directly at the gantry.
(i) Port and marine-related charges
Coastal evacuation brings charges linked to:
- Port tariffs/terminal service fees
- Towage/pilotage and marine services
- Jetty fees and berthing charges
- Security and compliance fees
Dangote explicitly frames these as “port charges, maritime levies and vessel-related costs.”
(ii) Vessel economics and waiting-time costs
Coastal shipping introduces:
- Vessel charter costs or freight costs
- Insurance and risk premiums (including security)
- Demurrage exposure if loading/discharge windows are missed
Even small delays can materially change per-litre costs when spread across many millions of litres.
(iii) Depot handling and storage economics
Once product hits a depot:
- Storage fees, throughput fees
- Product transfer losses, operational overhead
- Financing costs (inventory carry) and working capital pressures
(iv) Extra “middle layers” in the chain
Each additional layer can introduce:
- Markups to cover operating costs and capital recovery
- Commercial margins for intermediaries
- Dispute risk over who absorbs which fee (refinery vs marketer vs consumer)
BusinessDay describes this as an ecosystem of intermediaries and depot operators built around import-era supply chains—now under stress as Dangote pushes direct supply.
4) How this can push PMS toward ₦1,000/litre (a practical scenario)
A near-₦1,000/litre pump price can result when an already-high base price (ex-refinery or ex-depot) meets incremental distribution costs:
Step-by-step logic (illustrative)
- Base PMS price at gantry reflects crude cost/FX, refining margin, taxes/fees, and core logistics.
- Switching the evacuation mode to coastal introduces ~₦75/litre incremental costs, per Dangote’s statement.
- After coastal delivery to depots, PMS still needs inland trucking to retail outlets nationwide—so coastal does noteliminate road-distribution costs; it often changes wheretrucks load and how far they travel.
- In a deregulated environment, marketers typically price at:
- Replacement cost (what it costs to restock)
- Plus distribution and retail operating costs
- Plus margin and risk buffers
So if a large portion of volumes shift to a higher-cost route, the marginal litre can set a higher market-clearing pump price—especially in regions with tighter supply.
5) Why the industry is fighting over “gantry vs coastal”
This is not only about efficiency. It’s also about who owns the infrastructure and where profits sit.
Dangote’s incentives
- Direct lifting supports its “scale + speed” model
- Avoids costs it views as avoidable rent/levy layers
- Strengthens its control over product flow and pricing optics
Channels TV reported Dangote’s broader distribution plan using 4,000 CNG-powered trucks, stating the refinery wanted to reduce reliance on third-party carriers and avoid “an extra cost of ₦75 per litre” tied to offshore/coastal handling (in the context of SPM/handling charges).
Depot owners / marketers’ incentives
- Depots and jetties are sunk investments; coastal movement sustains their utilization
- Depots can act as regional buffers, smoothing supply disruptions
- Marketers prefer diversified loading options to manage bottlenecks and trucking scarcity
BusinessDay notes depot operators fear stranded assets and claims Dangote says a coastal logistics preference would add ₦75/litre, with marketers effectively seeking the refinery to absorb or pass through those costs.
6) The logistics reality: what can still raise prices even without coastal loading
Even if gantry remains the dominant mode, pump prices can still rise due to:
- Road transport costs (diesel, maintenance, insecurity, delays)
- Truck availability constraints and seasonal demand peaks
- Regional supply imbalances (distance from Lekki, congestion on major corridors)
- Financing costs for marketers (interest rates, working capital)
Dangote itself previously estimated average logistics costs around ₦45/litre in the context of nationwide distribution planning.
That figure underscores why the debate is intense: adding ₦75/litre on top of an already material logistics bill is a major shock.
7) What to watch next (signals that prices could move)
- Evacuation mix: If more volumes move coastal, watch for fast upward pressure in depot-linked pricing.
- Trucking throughput vs demand: If gantry throughput cannot match national draw in peak periods, marketers may rely more on depots/coastal routes.
- Port/terminal cost changes: Any tariff/fee increases in ports and marine services can feed directly into coastal cost per litre.
- Regulatory and labour friction: Disruptions in trucking, depot operations, or union disputes can create scarcity premiums.
Bottom line for Atlanticdigest readers
Dangote’s warning is essentially a delivered-cost argument: coastal evacuation adds layers—ports, vessels, depot handling—that can push retail prices higher without improving the underlying product. The refinery’s claimed ₦75/litre coastal premium is large enough to shift national pricing psychology toward ₦1,000/litre in a deregulated market, especially during tight-supply periods.
