Oil marketers in Nigeria are increasingly rebranding their filling stations by removing the Nigerian National Petroleum Company Limited (NNPCL) logo, as many dealers are terminating their franchise agreements with the state-owned company due to rising competition in the downstream oil sector.
Sources indicate that several marketers, particularly those in Lagos, are considering this shift, especially following the recent price cuts in refined petroleum products by Dangote Petroleum Refinery, based in Lekki. Some dealers, once affiliated with NNPCL, have already rebranded their stations along the Lagos-Ibadan Expressway, including locations in Wawa and Ibafo, where the NNPCL logo has been removed.
Independent marketers are seeking more affordable petroleum supplies, with deregulation intensifying competition in the sector. Many filling stations that were previously associated with NNPCL are now adopting new branding under private marketers, especially in Lagos and neighboring areas. More marketers are likely to sever ties with NNPCL due to the reduced cost of Premium Motor Spirit (PMS) sourced from Dangote’s refinery, which is cheaper than the imported fuel that NNPCL previously distributed.
A recent price war in the petrol sector was sparked when Dangote Petroleum Refinery lowered its loading cost from N950 to N890 per litre. Marketers view the rebranding of stations as a strategy to secure cheaper products from Dangote’s refinery and other suppliers, thereby improving their profit margins.
Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), confirmed the trend, explaining that NNPCL’s monopoly over fuel imports has ended. Marketers now have access to more affordable alternatives, prompting many to rebrand. He noted that NNPCL used to be the exclusive distributor, but with the arrival of Dangote Refinery, independent marketers have more options.
Olatide Jeremiah, an oil and gas expert, further explained that NNPCL’s franchise system was previously a way for marketers to acquire cheaper fuel. However, the emergence of Dangote’s refinery, offering lower prices, has rendered NNPCL’s system less profitable for independent marketers. Jeremiah added that the subsidy removal and the rise in petrol prices also led to the reconfiguration of the sector.
Akinola Ogunyolemi, Chairman of the Petroleum Tanker Drivers (PETROAN) in Lagos, remarked that many of the stations are not directly owned by NNPCL. Instead, they operate under franchise agreements. If these agreements are not renewed or if better offers arise, marketers will rebrand and switch affiliations.
The shift towards Dangote’s refinery has been prompted by its competitive pricing, which has put pressure on other marketers to lower their rates. As the price of imported petrol continues to rise, marketers are more inclined to source from Dangote’s refinery, further intensifying the competition.
The National Publicity Secretary of the Major Oil Marketers Association of Nigeria (MOMAN), along with several industry experts, have observed that the reduced landing cost of petrol is leading to further market shifts. Dangote’s reduction in ex-depot prices reflects a broader trend in the global energy market, with international crude oil prices falling.
With these shifts in pricing dynamics, Nigeria’s oil market is expected to see more competitive pricing wars as Dangote’s refinery continues to expand its footprint in the downstream sector, providing consumers with more affordable options and further challenging NNPCL’s dominance.