Petrol prices in Nigeria have seen a welcome drop, as fierce competition between the Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPC) has caused a shake-up in the country’s fuel pricing structure. The Independent Petroleum Marketers Association of Nigeria (IPMAN) has revealed that the rivalry between these two local oil giants has played a crucial role in the recent reduction of pump prices, benefiting both consumers and marketers alike.
A Game-Changing Price Reduction
Checks by Vanguard showed a significant adjustment in the prices at retail outlets nationwide, following a decrease in ex-depot prices from both Dangote Refinery and the Port Harcourt Refinery. For instance, NNPC Retail dropped its price per litre from N1,030 to N965, while other key players such as AA Rano and AYM Sharfa lowered their prices from N1,070 to N1,020 per litre. This follows a pattern of reductions across the country, with the retail prices at some stations falling in line with the revised ex-depot prices.
However, not all retailers have adjusted their prices. Conoil, for instance, maintained its pump price at N1,090 per litre, which is consistent with its price point in November. Despite this, industry analysts suggest that the prevailing price trend indicates healthy competition, with retailers scrambling to offer the most attractive rates to customers.
IPMAN’s Insight: Fueling the Drop
Speaking with Vanguard, Chief Chinedu Ukadike, the Public Relations Officer for IPMAN, offered insight into the ongoing price dynamics. According to Ukadike, the intense competition between the local refineries, notably Dangote and NNPC, has led to smoother supply and lower prices at the pump. “It is a good development for independent marketers and for consumers too. Normally, prices go up during this period due to increased demand, but right now, the opposite is happening,” Ukadike explained.
He continued: “Availability has been taken care of, and we are now seeing a price war between the two giants—NNPC and Dangote. This is good news for the market and consumers alike.” Ukadike also hinted that 2025 might bring even more favorable conditions for consumers, as Nigeria expects to add the Warri and Kaduna refineries to the list of active refineries in the country.
The Significance of Local Refineries
The competition between Dangote and NNPC is particularly significant for Nigeria’s petrol market, as both companies are contributing to the nation’s fuel supply without relying on imports. Before the arrival of local refineries like Dangote’s, Nigeria had to rely heavily on the international market for its petroleum needs, making the country vulnerable to global price fluctuations and foreign exchange issues.
Dangote’s refinery, in particular, has a capacity to process a staggering 650,000 barrels per day (bpd), while the Port Harcourt Refinery has a combined capacity of 560,000 bpd. As these local refineries begin to produce at full capacity, their impact on Nigeria’s fuel supply and foreign exchange reserves will be felt more keenly.
The Role of Independent Marketers
Independent marketers, who have often been caught in the crossfire of fluctuating oil prices, are also benefitting from the current developments. With the drop in ex-depot prices, many marketers are reporting increased sales and better access to fuel. According to Ukadike, independent marketers now have direct access to both the Dangote and NNPC refineries, allowing them to purchase petrol in larger quantities. This is a significant change from the previous situation, where marketers struggled to secure adequate stock due to high prices.
“There has been a slight increase in turnover,” Ukadike said. “When the price was around N1,300 per litre, many of our members barely sold 5,000 litres daily, but now, we are selling more than that. We are also able to get products directly, which has made a huge difference.”
Previously, Dangote limited bulk purchases to 10 million litres per order, which was a significant financial burden for many marketers. However, Dangote has recently eased these restrictions, reducing the minimum order size to 2 million litres, approximately N2 billion. This reduction has made it more manageable for marketers, particularly independent operators, to secure adequate fuel supplies.
Optimism for the Future
The ongoing developments in the Nigerian oil and gas sector suggest a bright future for both marketers and consumers. As the competition between Dangote and NNPC intensifies, the price war could lead to even more price reductions and better fuel availability. The potential addition of the Warri and Kaduna refineries to the mix in 2025 is expected to further increase the competition, making the market even more favorable for consumers.
Dr. Muda Yusuf, the Director and CEO of the Centre for the Promotion of Private Enterprise (CPPE), also weighed in on the situation, noting that the new refineries would have a significant impact on Nigeria’s foreign exchange market. “The import substitution effect of the Dangote and Port Harcourt refineries will ease the pressure on the forex market,” Yusuf stated. This could have wider economic benefits for Nigeria, which has long struggled with foreign exchange issues, especially in the face of rising global oil prices.
Marketers Adjust Prices in Real-Time
The ripple effects of the price drop have been felt across the retail market. As ex-depot prices from both Dangote Refinery and NNPC come in at around N899 per litre, marketers have begun to adjust their retail prices accordingly. MRS stations, as well as those affiliated with Dangote Petroleum Refinery, have been quick to revise their prices in response to the new ex-depot rates.
What’s Next for Nigerian Fuel Pricing?
As the fuel market continues to evolve, Nigerians can expect ongoing fluctuations in petrol prices. However, with the growing competition between Dangote, NNPC, and other refineries, it is likely that fuel prices will remain more stable and competitive than before. While the impact of these changes is still unfolding, the overall outlook appears promising for both consumers and marketers.
