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By NIyi JACOBS
The recent fuel supply and distribution agreement between Dangote Refinery and MRS Oil Nigeria Plc has significantly altered Nigeria’s downstream petroleum sector, positioning MRS as a dominant player. This partnership ensures that MRS handles over 40% of Dangote Refinery’s refined products destined for local consumption, giving it a substantial edge over other fuel marketers.
The deal has not only expanded MRS Oil’s market share but also fueled investor confidence, reflected in the company’s stock price surge. Before this transformation, MRS was a mid-tier player, lagging behind industry giants such as TotalEnergies, Mobil, and NNPC Retail Limited. However, with this strategic collaboration, MRS has climbed to the top of the downstream sector, controlling a significant portion of fuel distribution and retail in the country.
Dangote Refinery’s Game-Changing Entry
The Dangote Refinery, a 650,000 barrels per day (bpd) plant located in Ibeju-Lekki, Lagos, commenced operations in January 2024, producing diesel and aviation fuel. By September 2024, it expanded into gasoline refining, triggering major shifts in Nigeria’s fuel supply dynamics.
Initially, the Nigerian National Petroleum Company Limited (NNPCL) sought to monopolize Dangote’s petrol supply under a government-backed price control strategy. However, when the fuel subsidy regime ended in November 2024, the refinery reverted to direct sales to marketers, setting the stage for MRS Oil’s rise.
Despite opportunities for bulk purchases, most major fuel marketers, including TotalEnergies and Mobil, opted to continue fuel imports rather than partner with Dangote Refinery. This reluctance gave MRS an opening to become the refinery’s largest distributor.
How MRS Oil Secured Market Dominance
MRS Oil’s success is largely due to its strategic positioning and strong midstream infrastructure, which includes:
Three fuel depots in Isolo, Apapa, and Tincan Island, with a 150-million-liter storage capacity.
A dedicated jetty in Apapa, Lagos, allowing direct import and distribution.
A modern lubricant blending plant.
A large fleet of distribution trucks, ensuring seamless fuel supply.
With these assets, MRS effectively displaced several independent tank farm operators who had traditionally dominated wholesale fuel distribution in Nigeria.
Additionally, independent marketers who could not meet Dangote Refinery’s 1-million-liter bulk purchase requirement found a reliable intermediary in MRS. Through its wholesale operations, MRS supplies smaller fuel stations, enabling them to access Dangote’s competitively priced fuel.
Dangote’s Pricing Strategy: A Catalyst for Market Shift
One of the most significant factors driving MRS Oil’s market dominance is Dangote Refinery’s aggressive pricing strategy. The refinery has continuously lowered the prices of diesel and petrol, making imported fuel less attractive.
Diesel prices fell from ₦1,900 per liter (April 2024) to ₦1,100 per liter (March 2025), forcing competitors to cut prices.
Petrol prices dropped below ₦900 per liter in Dangote’s partnered stations, significantly undercutting imported fuel.
This pricing advantage has drawn massive customer traffic to MRS stations, creating long queues and increased demand. In contrast, competitors relying on imported fuel have struggled to match the lower prices.
Retail Expansion and Rebranding Wave
Due to the surge in demand, many independent fuel station owners are rebranding under the MRS franchise, signing long-term offtake agreements to secure fuel supplies at Dangote-linked prices. This has expanded MRS’s retail network, reinforcing its grip on the sector.
Additionally, members of Independent Petroleum Marketers Association of Nigeria (IPMAN) and Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), who previously sourced fuel from private tank farms, now turn to MRS for supplies.
An industry source confirmed that MRS offers competitive depot rates, allowing independent marketers to procure smaller volumes at Dangote-linked prices, ensuring affordability without requiring massive capital outlays.
Market Impact and Financial Performance
The stock market has responded favorably to MRS Oil’s strategic positioning, with investors betting on continued growth.
On March 7, 2025, MRS Oil’s stock closed at ₦174.80 per share, up from ₦159.70 on December 18, 2024, before Dangote’s second major petrol price cut.
The company’s market capitalization hit ₦59.95 billion, reflecting growing investor confidence.
A regulatory filing in December 2024 projected MRS Oil’s Q1 2025 revenue at ₦129.36 billion, a significant increase from previous years.
Stock market analysts anticipate further growth as MRS cements its leadership in fuel distribution and retail.
The Bigger Picture: Dangote’s Petroleum Sector Influence
Beyond the downstream sector, Aliko Dangote’s influence extends into the midstream and upstream petroleum industries, reinforcing his dominant market position.
His oil exploration company, West African E&P Venture, holds an 85% stake in two Niger Delta oil blocks (OML 71 and OML 72).
These oil wells, which started production at 20,000 barrels per day (bpd), are projected to reach 50,000 bpd by Q1 2025.
The assets hold 300 million barrels of recoverable crude oil and 2.3 trillion cubic feet of natural gas, further securing Dangote’s supply chain.
With these investments, Dangote has strategically positioned himself as a key player across all segments of Nigeria’s petroleum industry—upstream, midstream, and downstream.
What Lies Ahead for MRS and the Market?
The rise of MRS Oil signals a shift in Nigeria’s fuel distribution landscape, with traditional market leaders losing ground to a new industry structure driven by Dangote’s refinery output.
If import-dependent fuel marketers fail to adjust their sourcing strategies, they risk further market share losses.
As Dangote Refinery continues to expand its production capacity, MRS Oil’s dominance could become even more pronounced.
The government’s stance on import liberalization vs. domestic refining will be crucial in determining long-term market trends.
For now, MRS Oil has successfully leveraged its partnership with Dangote Refinery to rise to the top of the Nigerian petroleum sector, reshaping competition and redefining supply chain dynamics
