The Nigerian National Petroleum Company Limited (NNPCL) on Tuesday slashed the pump price of Premium Motor Spirit (PMS), commonly known as petrol, from N945 per litre to N860 per litre in Lagos and N865 in Abuja following Dangote Refinery’s earlier price cut.
The unexpected move has intensified a price war between the two oil giants and has raised concerns about the sustainability of the nation’s downstream petroleum sector.
The price cut was implemented across NNPCL’s retail outlets in strategic locations, including Ori-Oke, Egbe, Ikoyi, and Ikorodu Road in Lagos, as well as Lugbe and Ketampe in the Federal Capital Territory (FCT).
The decision is seen as a bid to retain market share following Dangote’s reduction which garnered nationwide applause.
While NNPCL has yet to issue an official statement explaining the price cut, industry analysts suggest it is a direct response to mounting market pressures and an attempt to mitigate the financial burden on Nigerians facing high fuel costs.
The development comes amid warnings from stakeholders about the dangers of a potential oligopoly in the sector if the rivalry between NNPCL and Dangote is not carefully managed.
“The NNPC is using imported products to compete against Dangote, rather than leveraging its refineries. This approach affects the stability of the exchange market and has unintended consequences for the macroeconomic system,” said Wunmi Iledare, an energy expert.
Iledare described the pricing strategy as anti-competitive and warned that it could lead to structural distortions in the petroleum market if not promptly addressed by regulators.
The price war has already taken a toll on independent petroleum marketers and forced many members of the Independent Petroleum Marketers Association of Nigeria (IPMAN) to lower prices despite having purchased stock at higher rates.
However, their efforts have been insufficient to prevent a mass shift of consumers to NNPCL and MRS stations, which are offering lower prices.
Hammed Fashola, National Vice President of IPMAN, described NNPCL’s price reduction as a “relief for Nigerians” but admitted that the move has placed significant financial strain on independent marketers.
“While NNPCL is selling at N860 per litre at its retail stations, the new price has yet to be reflected on the official portal,” Fashola said.
NNPCL and Dangote took a substantial revenue cut to gain market and better position themselves for better customer acquisition.
Dangote has pledged to absorb N16 billion in losses by refunding N65 per litre to marketers who had purchased stock at higher prices.
The move is part of a broader strategy to leverage economies of scale and undercut competitors.
