The competition in Nigeria’s downstream oil sector has intensified as independent petroleum marketers shift away from the Dangote Petroleum Refinery’s N825 per litre gantry price for cheaper imported products.
The development has triggered a price war, with private depots now offering lower rates to drive down petrol prices across the market.
The move follows a recent revelation that the landing cost of imported Premium Motor Spirit (PMS) has dropped to N774.72 per litre, a N50.28 reduction from Dangote’s N825 per litre loading price.
This price shift, driven by lower crude oil costs and reduced logistics expenses, has led to an increased supply of cheaper imported fuel, giving marketers a more competitive alternative to refinery-produced petrol.
Market findings indicate that private depot operators, seeking to capitalize on the price disparity, have adjusted their rates to undercut refinery pricing and force a strategic shift in supply dynamics.
Major private depots, including AA RANO, MENJ, MRS TINCAN, WOSBAB, AITEO, and RAINOIL, have all adjusted their prices to between N830 and N832 per litre, effectively making them a more attractive option for retailers.
Industry experts say that the continued price decline may push pump prices down to about N800 per litre, as retailers look to pass on cost savings to consumers.
According to the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Ukadike Chinedu, further drops in crude oil prices could accelerate petrol price reductions nationwide.
The impact of the ongoing price war has been particularly severe for petroleum importers, who are reportedly losing an estimated N2.5 billion daily and N75 billion monthly due to the price reduction.
To mitigate losses, importers have secured fresh supplies at reduced costs, allowing them to sell below refinery rates.
Commenting on the situation, petroleum industry analyst Olatide Jeremiah, CEO of PetroleumPrice.ng, predicted that the Dangote Refinery may be forced to lower its ex-gantry price to remain competitive.
He noted that most marketers have switched to private depots, where prices are more stable compared to the refinery’s frequent price adjustments.
“Marketers who bought petrol at N825 from Dangote are now selling at N835 per litre, barely making a profit, while those sourcing from private depots are getting their supply at N830 to N832 per litre. Many of them have stopped buying from the refinery altogether, leading to reduced activity at Dangote’s gantry,” he explained.
While the price reductions may offer temporary relief to consumers, industry stakeholders warn that frequent fluctuations create uncertainty for marketers, who are struggling to maintain profitability.
The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) has raised concerns about the lack of price regulation in a fully deregulated market, urging policymakers to consider measures that stabilize fuel pricing over longer periods.
