The downstream oil sector in Nigeria has witnessed intensified competition as major oil marketers offer lower prices than the N825 per litre gantry loading cost set by the Dangote Petroleum Refinery.
This development comes amid revelations that the landing cost of imported Premium Motor Spirit (PMS) has dropped to N774.72 per litre. With the continued decline in costs, analysts predict that the pump price of petrol could fall to around N800 per litre.
Industry stakeholders note that the N774.72 per litre landing cost—factoring in shipping, import duties, and exchange rate fluctuations—represents a significant N50.28 reduction compared to the refinery’s gantry loading price. This has triggered a price war, with retail marketers opting to source imported products over Dangote refinery supplies due to cost advantages.
NNPC and Marketers Respond to Price Cuts
Last week, the Nigerian National Petroleum Company (NNPC) lowered its retail petrol price to between N860 and N880 per litre, down from N945 and N965 in Lagos and Abuja. This followed Dangote refinery’s price adjustment, which brought its ex-depot price down from N890 to N825 per litre in response to market conditions.
Despite these reductions, independent importers have capitalized on lower landing costs, enabling private depots to offer even more competitive prices. Findings show that private depots such as AA RANO, MENJ, and MRS TINCAN have set their loading prices at N830 per litre, while others like WOSBAB, AITEO, and RAINOIL are selling at N832 and N831 per litre.
Meanwhile, marketers who purchased petrol from Dangote refinery at N825 per litre are now selling at N835 per litre, realizing a slim profit margin of just N1 per litre—N4 higher than private depot rates.
Price Fluctuations Force Shift in Market Strategy
Oil and gas expert Olatide Jeremiah has predicted that Dangote refinery may be forced to further lower its prices to maintain competitiveness.
“The refinery price is N825 per litre, and marketers pay an additional N9 in NMDPRA fees and levies, making the total N834 per litre. However, private depots have been able to secure cheaper imports, allowing them to sell at N830 per litre. This has led many marketers to abandon Dangote refinery products in favor of private depot supplies,” Jeremiah explained.
He added that the expenses associated with trucking fuel from Dangote refinery—ranging between N40 and N45 per litre—make it an increasingly unattractive option for marketers.
Industry Players Call for Regulatory Stability
Amid the ongoing price fluctuations, the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) has criticized the frequent price adjustments, stating that marketers are incurring losses.
PETROAN Publicity Secretary Joseph Obele urged for regulatory intervention, suggesting a mandatory six-month interval before price changes are implemented. Additionally, the association has softened its stance on fuel imports, advocating for increased importation to prevent monopoly in the sector.
As the price war intensifies, the Nigerian fuel market remains in a state of flux, with competition among private importers, independent marketers, and Dangote refinery shaping the next phase of pricing dynamics.