Price war rages as NNPC matches Dangote’s N860/litre

…Petrol importers lose as landing cost hits N969/litre

Business Day ------------ A fierce petrol price war has erupted in Nigeria’s downstream oil sector as the Nigerian National Petroleum Company (NNPC) has moved to match the N860 per litre set by Dangote Petroleum Refinery.
For years, petrol pricing was largely dictated by government regulations, with subsidies playing a central role in stabilising pump prices.
However, the removal of subsidies in 2023 and the subsequent deregulation of the downstream petroleum sector have ushered in a new era of market-driven competition.
This competition has sparked an aggressive price war among marketers seeking to capture the market share in an environment where consumers are highly sensitive to price fluctuations.
The development has sparked intense competition, with consumers and industry stakeholders watching closely as the two giants battle for market dominance.
On Monday, retail outlets surveyed by BusinessDay showed that the NNPC has adjusted its petrol price to N860 per litre.
Although there is no official communication from the NNPC yet, some stations in Lagos adjusted their pumps to N860 per litre, down from N945 as of Sunday.
This comes a few days after the Dangote Refinery reduced its ex-depot petrol price from N890 to N825 per litre. This is the second price reduction in the new year, and the third one in a space of two months.
Dangote, in a public notice on the price slash, announced three filling stations in Lagos as its partner off-takers.
They include MRS: N860 per litre; AP: N865 per litre; and Heyden: N865 per litre.
The reduction by NNPC, the country’s largest fuel supplier, has sparked a wave of competitive pricing among private marketers.
Industry experts say the NNPC’s decision to match Dangote’s price is a strategic move to remain competitive in a rapidly evolving market.
“It is true. The NNPC is selling petrol at N860 per litre at the filling stations. Though this has not been reflected on the portal, they told me they are working on updating the portal,” Hammed Fashola, national vice president of the Independent Petroleum Marketers Association of Nigeria, said.
Aisha Mohammed, an energy analyst at the Lagos-based Centre for Development Studies, said international crude oil prices are highly politicised and ‘very volatile.’
“Now that President Trump is threatening to increase the US crude oil reserve, it could push prices further down, leading to a downward review of petroleum product prices. So, it is a two-edged sword. For now, it favours consumers to the detriment of producers. Tomorrow, the table can turn,” Mohammed said.
According to Adeola Ogunleye, a commercial bus driver in Lagos, “This is good news, but we hope it’s not just a temporary move to calm the public.”
“Fuel prices have been too high for too long, and we need lasting solutions,” he added.

Competition to continue

Yemi Oke, a professor of energy, said the competition in the petroleum sector would continue.
“We have seen competitiveness in the petroleum sector, which is now driving the pump price of premium motor spirit (PMS) down south,” he said.
He added, “That is going to continue. Naturally, it is a question of demand and supply. Once supply outweighs demand, prices will go south.”

A blow to importers

BusinessDay’s findings showed petrol importers may lose billions of naira daily following the latest PMS price reduction announced by Dangote refinery and the NNPC.
Recall that Nigeria, despite being Africa’s largest oil producer, had relied heavily on imported refined petroleum products due to the inefficiency and the underperformance of its state-owned refineries.
This dependency created a lucrative business for fuel importers, who have enjoyed near-monopoly status in the market.
However, Dangote’s entry into the refining space has disrupted this status quo, forcing importers to rethink their strategies.
Industry insiders reveal that many importers are now struggling to compete with Dangote’s pricing.
“The margins are shrinking by the day,” said a Lagos-based fuel distributor, who spoke on condition of anonymity. “Dangote refinery has access to cheaper crude oil, economies of scale, and a more efficient refining process. We simply can’t match their prices without incurring significant losses.”
According to the Major Energies Marketers Association of Nigeria, the average 30-day landing cost of petrol as of February 21, 2025, was N969 per litre.
This is N144 above the N825 ex-depot price of PMS at the Dangote refinery.
Adeola Adenikinju, a professor of economics at the University of Ibadan, said the importers will have to bear their losses, saying this is a competitive market.
According to him, Dangote and other refineries in the country should be able to satisfy local needs without recourse to importation.
“The Dangote refinery announced recently that it’s able to meet domestic demand. That means, technically, we don’t need to import because the domestic production is sufficient. Whatever it’s doing with what the other refineries are producing, it should be able to meet domestic demand. So imports may not be necessary,” Adenikinju said in a note.