Dangote Petrol Price War: How Nigeria’s Fuel Market Faces a Brutal Downstream Shake-Up
Nigeria’s downstream petroleum sector is in the grip of a fierce price war following Dangote Petroleum Refinery’s dramatic cut in the gantry price of Premium Motor Spirit (PMS). The refinery reduced prices from N828 to N699 per litre, a move welcomed by consumers but devastating for importers, depot owners, and retail marketers. Analysts estimate that fuel importers could lose up to N102.48 billion monthly, while Dangote Refinery itself may face losses of around N91 billion—a sign of the high-stakes competition reshaping the market.
While Nigerians are enjoying relief at the pumps, the sharp reduction has put fuel marketers in a precarious position. Retailers with existing stocks purchased at higher prices are forced to sell below cost, incurring significant losses. Market data show that depots in Lagos have cut prices by approximately 14%, with some reducing PMS from N828 to N710 per litre in just one week. Dangote-linked stations are selling petrol at N703 per litre, prompting competitors to recalibrate quickly to avoid stock overhangs and declining sales.
Industry leaders warn that the aggressive price cuts expose deep fractures in Nigeria’s deregulated petroleum market. The Independent Petroleum Marketers Association of Nigeria cautioned that retailers may lose over N80 billion, while Dangote acknowledged his refinery is also bleeding financially. “For importers, I wish them good luck,” said Chinedu Ukadike, warning that many still have cargoes on waterways that may arrive at now-unprofitable prices. Despite losses, Dangote insists on maintaining lower prices to protect local refining and challenge imported fuel dominance.
The price war has drawn political attention. Dangote publicly criticized the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) for issuing import licenses despite sufficient local production. In response, the House of Representatives Committee on Petroleum Resources summoned both Dangote and the regulator to mediate rising tensions threatening downstream stability. Industry experts caution that ongoing conflicts between regulators and private players could undermine energy security and destabilize the sector.
For now, Nigerians benefit from cheaper petrol, with MRS filling stations leading sales at N739 per litre, and other depots following suit. However, beneath the short-term relief is a fierce battle that has left importers, depot owners, and marketers financially strained. Analysts warn that without careful coordination between regulators, refiners, and marketers, the downstream petroleum market may experience further volatility in the coming months, leaving both consumers and industry players in a precarious balancing act.
source: punch