In what appears to be a reaction to Dangote Refinery’s recent price cut, the Nigerian National Petroleum Company Limited (NNPCL) has reduced the pump price of Premium Motor Spirit (PMS), commonly known as petrol, from ₦945 per litre to ₦860 in Lagos and ₦865 in Abuja.
This development has raised concerns among industry stakeholders, who warn that without regulatory intervention, the downstream petroleum sector could face serious market and structural challenges. They argue that both NNPCL and Dangote are operating at a loss in a bid to dominate the market, which could lead to long-term instability.
Reports indicate that NNPCL retail stations in Ori-Oke, Egbe, Ikoyi, Ikorodu Road in Lagos, as well as major locations in Abuja, including Lugbe and Katampe, have already adjusted their prices downward. Meanwhile, independent marketers under IPMAN have also reduced prices despite purchasing stock at higher rates. However, many of their outlets are losing customers to MRS and NNPCL stations, leading to financial strain.
While NNPCL has yet to issue an official statement on the price cut, industry analysts believe the move is aimed at easing the financial burden on Nigerians and responding to competitive pressures.
Experts Warn of Anti-Competitive Practices
Energy expert Prof. Wunmi Iledare has criticized the current pricing dynamics, describing them as anti-competitive. He noted that NNPCL and Dangote’s interdependent pricing strategies reflect an oligopoly, where two dominant players control the market.
“The NNPC is relying on imported fuel to compete with Dangote instead of utilizing its refineries. This strategy not only affects foreign exchange stability but also has broader macroeconomic consequences,” Iledare warned.
Reports suggest that Dangote may have deliberately cut prices to clear existing stock, with the refinery reportedly absorbing ₦16 billion in losses by refunding ₦65 per litre to marketers to maintain lower retail prices.
Calls for Regulatory Oversight
President of the Nigerian Economic Society (NES), Prof. Adeola Adenikinju, has called for regulatory authorities to ensure fair competition and prevent market manipulation.
“They must ensure that no operator is trying to eliminate competition to dominate the market. The fair price of petrol should be assessed to ensure it remains within an acceptable range,” he stated.
Similarly, IPMAN Vice President Hammed Fashola welcomed NNPCL’s price reduction, calling it a relief for consumers. He confirmed that despite losses, many marketers have adjusted their prices downward to remain competitive.
Fashola also disclosed that Dangote has assured marketers—who purchased stock from MRS, Ardova, and Heyden before the price cut—that they could receive refunds. However, while NNPCL’s official pump price stands at ₦860 per litre, the updated pricing has yet to be reflected on the company’s official portal.
More Price Drops Expected as Competition Increases
Experts believe the price war is a natural consequence of market forces. Dr. Ayodele Oni, an energy analyst, explained that businesses frequently adjust prices to gain market share, improve efficiency, and secure cheaper supplies.
Prof. Segun Ajibola of Babcock University predicted that fuel prices could decline further as Dangote Refinery reaches full production capacity and more private refineries come online.
“This is only the beginning. As private investors expand local refining, fuel prices could return to pre-May 2023 levels within five to ten years,” Ajibola projected.
He urged NNPCL to improve operational efficiency and curb corruption, adding that competition ultimately benefits Nigerian consumers by driving down fuel prices.
