In a move seen as a response to Dangote Refinery’s recent price reduction, the Nigerian National Petroleum Company Limited (NNPCL) has cut the pump price of Premium Motor Spirit (PMS) from N945 per litre to N860 per litre in Lagos and N865 in Abuja.
Industry experts warn that the ongoing price battle between NNPCL and Dangote could destabilize the downstream petroleum sector, urging regulatory intervention to prevent an oligopolistic market structure.
Fuel Market Faces Structural Challenges
Market analysts point out that both Dangote and NNPCL are operating at a loss to capture market share.
Major NNPC retail outlets in Ori-Oke, Egbe, Ikoyi, Ikorodu Road in Lagos, and parts of Abuja (Lugbe and Katampe) have already adjusted their pump prices downward.
Although independent petroleum marketers have also lowered prices despite purchasing at higher rates, many consumers are flocking to MRS and NNPC outlets due to better deals.
While NNPCL has yet to officially comment on the price reduction, analysts believe it is an effort to ease the financial burden on Nigerians and respond to market pressure.
Experts Weigh in on Price Competition
Energy expert Wunmi Iledare criticized the price battle, calling it anti-competitive and unsustainable.
“The NNPC is using imported products to compete against Dangote, rather than leveraging its refineries. This approach affects the stability of the exchange market and has unintended consequences for the macroeconomic system,” Iledare said.
Some analysts revealed that Dangote has been selling at a loss, reportedly absorbing N16 billion in losses by refunding N65 per litre to marketers to ensure Nigerians benefit from lower prices.
Professor Adeola Adenikinju, President of the Nigerian Economic Society (NES), emphasized the need for regulatory oversight to maintain a fair and efficient market.
“They must determine that no one is trying to drive out competition in the short run to dominate the market. The fair price for petrol products can be determined to see if the price lies within some acceptable range,” Adenikinju said.
Marketers React to NNPC’s Price Cut
National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, welcomed the price reduction, calling it a relief for Nigerians.
“While NNPCL is selling at N860 per litre at its retail stations, the new price has yet to be reflected on the official portal, though efforts are reportedly underway to update it,” Fashola said.
He also confirmed that Dangote assured marketers who purchased stock from MRS, Ardova, and Heyden within the pricing adjustment period that they might receive refunds.
However, the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) President, Billy Gillis-Harry, stated that he had not yet received official details on NNPC’s revised pump price.
Future Fuel Prices: What to Expect?
Energy expert Dr. Ayodele Oni, an energy partner at Bloomfield, attributed the price war to market competition, noting that businesses often lower prices to expand market share and improve efficiency.
Professor Segun Ajibola of Babcock University, former President of the Chartered Institute of Bankers of Nigeria (CIBN), predicted further price reductions as Dangote Refinery scales production and other private refineries enter the market.
“This is just the beginning. As more private investors start refining locally, fuel prices could return to pre-May 2023 levels in five to ten years,” Ajibola said.
He urged NNPCL to embrace competition by improving efficiency and eliminating corruption, commending the government for allowing open market competition.
“The price war ultimately benefits Nigerians by making fuel more affordable,” Ajibola added.
