Nigeria’s downstream oil sector has entered a fierce petrol price war, as filling stations slash pump prices by as much as N100 per litre following aggressive pricing from the Dangote Petroleum Refinery. In Lagos and Ogun states, several MRS stations began selling Premium Motor Spirit (PMS) at N739 per litre, triggering mass patronage from motorists and forcing competing retailers to cut prices sharply to avoid losing customers.
The turning point came after the refinery reduced its ex-depot (gantry) price by N129, from N828 to N699 per litre, a move announced by Aliko Dangote, President of the Dangote Group. Dangote said the refinery would enforce lower pump prices nationwide, accusing some marketers of attempting to keep prices artificially high. He declared that petrol should not sell above N740 per litre during December and January, vowing to use all available resources to drive prices down.
The impact was immediate. MRS outlets, including stations in Alapere and along the Lagos-Ibadan Expressway, recorded long queues as motorists deliberately avoided stations selling above N800. Within days, rival stations reduced prices from over N900 to between N750 and N799 per litre, despite selling below cost. Industry players say the situation underscores how price-sensitive Nigerian consumers have become under the fully deregulated fuel market.
The competition has also put pressure on the Nigerian National Petroleum Company Limited, which reportedly cut pump prices to between N825 and N840 per litre, depending on location. However, with a landing cost estimated at about N828 per litre, analysts say imported petrol is struggling to compete with locally refined fuel. Many NNPC stations, once crowded due to subsidies, are now seeing reduced traffic as motorists chase cheaper alternatives.
Despite heavy losses estimated at over N100bn monthly for importers and about N91bn for the Dangote refinery, the price battle shows no sign of easing. The Independent Petroleum Marketers Association of Nigeria says price now determines patronage, while Dangote insists cheaper fuel is essential for Nigerians and for the survival of his $20bn investment. With more than 1,000 fuel trucks loading daily at the refinery, the message is clear: competition has intensified, and for now, motorists are the biggest winners.
source: punch