A fierce price war has erupted in Nigeria’s downstream oil sector as independent petrol marketers slash pump prices below the rates offered by the Dangote Petroleum Refinery, intensifying competition and reshaping the nation’s fuel market.
The move, which has seen some filling stations sell petrol as low as N815 per litre compared to Dangote’s N820, has sparked debates over the future of local refining and fuel importation.
According to industry findings, independent marketers and depot owners have reduced ex-depot prices to between N815 and N847 per litre, undercutting Dangote’s partner stations, such as MRS and Heyden, which sell at N865 to N875 in Lagos and Ogun States.
A notable example is SGR Filling Station in Ogun State, which dropped its price to N847 per litre on Tuesday, drawing significant customer traffic.
The Nigerian National Petroleum Company Limited (NNPC), meanwhile, continues to sell at N825 per litre, though it recently adjusted its rate downward by N5 to N890 per litre, signaling its own response to the competitive pressure.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), hailed the price cuts as a triumph of market liberalization.
“Depot owners are dropping prices. Some are selling at N815, others at N817, while Dangote is at N820. This is the beauty of an open market,” Ukadike told The Punch, emphasizing that competition is driving affordability for consumers.
He also dismissed concerns about substandard fuel imports, asserting that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is equipped to ensure quality control.
The price slashes come amid a call by Aliko Dangote, President of the Dangote Group, for the Federal Government to ban petroleum product imports to protect local refineries.
Dangote argues that continued importation undermines Nigeria’s quest for energy self-sufficiency and discourages investment in domestic refining.
“If the ‘Nigeria First’ policy applies to other sectors, it should extend to oil and gas,” he said during a recent facility tour, warning that imported fuel is “killing local refining.”
However, marketers have pushed back, arguing that an import ban would stifle competition and potentially lead to monopolistic pricing.
The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has also raised concerns about supply and pricing challenges with Dangote Refinery.
Executive Secretary Olufemi Adewole noted that issues with landing costs, logistics, and uncompetitive pricing have forced many marketers to rely on imports, contradicting the refinery’s goal of reducing Nigeria’s dependence on foreign fuel.
“We expected the refinery to stabilize the market, but the pricing strategy hasn’t met those expectations,” Adewole said at an energy summit in Lagos.
For consumers, the price war has brought welcome relief, with pump prices in some areas dropping to levels not seen in months.
Motorists in Lagos and Abuja reported savings of N30 to N35 per litre at independent stations, though some expressed skepticism about the sustainability of the cuts.
“It’s good for now, but I hope this isn’t just a temporary stunt,” said Tunde Adebayo, a taxi driver in Lagos.
As the fuel war intensifies, all eyes are on President Bola Tinubu’s administration to navigate the delicate balance between supporting local refining and maintaining a liberalized market.
With Nigerians reaping the benefits of lower prices, the outcome of this competition could redefine the country’s energy landscape for years to come.
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