Petroleum importers and marketers in Nigeria are facing severe financial strain as Dangote Petroleum Refinery's aggressive price cuts intensify competition in the deregulated downstream sector.
The refinery recently reduced its ex-depot (gantry) price for Premium Motor Spirit (PMS) from ₦828 to ₦699 per litre, a ₦129 drop effective from mid-December 2025.
This move has compelled private depots and importers to slash their prices, leading to projected monthly losses of up to ₦102.48 billion for importers.
Based on Nigeria's average daily petrol consumption of around 50 million litres with importers supplying approximately 26.48 million litres daily the ₦129 per litre differential results in daily losses of about ₦3.41 billion.
Private depots in Lagos have responded with price reductions of up to 14%, with examples including drops from ₦828 to as low as ₦710 per litre.
This has caused weakened demand, eroding profit margins, and risks of stock overhang throughout the supply chain.Importers with undischarged cargoes still at sea or in storage are hit hardest, as they struggle to offload stocks acquired at higher costs.
Industry sources describe the situation as "financial bleeding," with some calling the sudden ₦129 cut a "big shock."
Retail outlets are also affected, forced to sell existing inventory purchased at rates around ₦828 per litre below cost to stay competitive.
Collective losses for marketers are estimated to exceed ₦80 billion in some reports.Marketers have appealed for relief measures from Dangote Refinery, such as discounts on future lifts or extended credit terms, to offset the impact of selling at reduced prices.
While consumers stand to benefit from lower pump prices potentially capping at ₦739-₦740 per litre nationwide the price war highlights tensions between local refining and ongoing imports, with Dangote Group President Aliko Dangote emphasising that the refinery prioritises affordable fuel for Nigerians over short-term profits.
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