Falling Petrol Prices Threaten Nigeria’s Oil and Gas Stocks as Dangote Refinery Shakes Up Market
The competition between Dangote Refinery and petrol marketers is putting immense pressure on Nigeria’s oil and gas stocks, creating uncertainty in the market. As of March 12, the NGX Oil and Gas Index experienced a 7% decline, reflecting a broader downturn in the sector. Despite strong financial performance in 2024, companies like MRS Oil, Conoil, and TotalEnergies have seen significant drops in stock prices due to falling petrol prices. While some analysts believe this trend is linked to profit-taking, the deeper cause lies in Dangote Refinery’s aggressive pricing strategy.
MRS Oil Nigeria, a partner of Dangote Refinery, has seen its share price fall by over 18% in 2025, with significant losses after Dangote’s price cuts in early March. Similarly, TotalEnergies, despite a solid 2024 financial year, lost 8.74% of its stock value in 2025. Eterna Plc has bucked the trend, gaining 56.4% year-to-date, showing resilience amid the market decline. Analysts continue to monitor the performance of these companies as their future profitability becomes increasingly uncertain.
The price dynamics in 2024 had previously led to a boom for downstream players, with petrol prices reaching an all-time high of N1,250 per litre. This surge boosted revenues for oil companies, including TotalEnergies, which reported over a trillion Naira in revenue, and MRS Oil, which saw a 71% revenue increase. However, the entry of Dangote Refinery and a stronger Naira reversed the trend by year-end, leading to lower petrol prices and forecasting a tough 2025.
As the market braces for the reality of lower petrol prices, industry players are cautious about their earnings forecasts. TotalEnergies and Eterna Plc have already projected significant revenue declines, while MRS Oil is uncertain about sustaining its positive growth. The Petroleum Retail Owners Association of Nigeria (PETROAN) has raised concerns over the financial strain on petrol retailers, warning of potential job losses and economic instability. The coming months will be critical for the industry’s future, as the impact of these price fluctuations continues to unfold.
SOURCE: BUSINESS DAY