In response to the instability caused by fluctuating petrol prices in Nigeria, fuel marketers are forming strategic partnerships to limit their losses and ensure steady supply across the country. The liberalisation of the downstream sector has led to aggressive competition, primarily between Dangote Refinery and NNPC Retail Limited, both slashing prices to dominate the market.
Dangote Refinery has partnered with several major retail outlets, including Ardova, MRS, and Techno Oil, to offer petrol at a reduced price of N875 per litre. NNPC Retail Limited, in a bid to maintain market relevance, has responded with an even lower rate of N870 per litre. While this pricing battle benefits consumers with more affordable options, it has become a financial strain on independent fuel marketers.
Independent marketers are struggling with the rapid pace of price changes, often suffering losses when bulk purchases are undercut by sudden price cuts from larger competitors. In response, marketers are now adopting a collaborative buying strategy where three marketers jointly purchase smaller quantities, such as 15,000 litres each, rather than a full 45,000-litre truckload.
This approach enables them to sell their product faster, reducing the risk of being affected by sudden price drops. According to IPMAN’s Publicity Secretary, Mr. Chinedu Ukadike, this method allows marketers to operate within slimmer margins while staying afloat in a volatile market. The tactic reflects a shift toward leaner, faster operations in response to an unpredictable pricing environment.
Ukadike also urged the Federal Government to take steps to prevent a monopolistic fuel market by reviving all four state-owned refineries. He warned that relying solely on a few dominant players poses risks to national fuel stability and called for policies that ensure fair competition in the sector.
Source: The Sun