Olufemi Adeyemi
The downstream petroleum market in Nigeria is witnessing heightened competition as several filling stations sell Premium Motor Spirit (PMS) below the N739 per litre benchmark set by the Dangote Petroleum Refinery, deepening a price war that has gripped the sector since December.
Following the refinery’s surprise slash of petrol pump prices from around N900 to N739 per litre, importers and depot owners have reported mounting losses. To stay competitive, many retailers have resorted to selling PMS below cost.
A weekend survey revealed that some outlets are now undercutting Dangote’s main partner, MRS Oil, which had been tasked with enforcing the new price. NIPCO offered PMS at N738 per litre, SAO stations at N735, Akiavic at N737, and an AP station in Mowe, Ogun State, charged N736, lower than nearby MRS outlets.
Market dynamics show that filling stations closely monitor competitors’ prices, with motorists flocking to the cheapest pumps, leaving higher-priced outlets struggling for customers. According to the Major Energies Marketers Association of Nigeria, the average landing cost of petrol is N762.38 per litre, compared to Dangote’s ex-gantry price of N699. Despite the difference, importers still adjust prices downward to match MRS-backed competition.
Operators insist the pricing decisions are strategic, not a reflection of import costs. “This is not a function of whether imports are better or not, but simply a market strategy to get a good share of the market. We are not at war with any marketer or depot operator nor any refinery,” one operator said, speaking anonymously.
The controversy stems from Dangote’s December 12 announcement reducing the gantry price by N129 from N828 to N699 per litre. Dangote warned marketers against keeping pump prices high, pledging to ensure nationwide compliance. As a result, motorists began boycotting expensive outlets, creating queues at MRS stations in Lagos and Ogun states.
Chinedu Ukadike, spokesperson for the Independent Petroleum Marketers Association of Nigeria, noted that competition now revolves almost entirely around pricing. “Wherever the fuel is cheap, that is where the marketers go. So, we are in a price war. Demand and supply determine the price,” he said. Ukadike also emphasized that bank interest costs pressure marketers to align prices competitively, lest capital erosion occurs.
Currently, many stations sell petrol below N800 per litre, reflecting ongoing price adjustments.
The Dangote refinery, in a weekend statement, highlighted its efforts to broaden access and improve distribution. Supply under marketers’ arrangements began in October 2025 with 600 million litres of PMS, scaled up to 1.5 billion litres by December. Measures to enhance liquidity and participation include reducing minimum purchase volumes from two million litres to 250,000 litres and offering a 10-day credit facility backed by bank guarantees.
The refinery noted that these initiatives have increased domestic PMS usage, reduced dependence on imports, and fostered more competitive retail pricing. It clarified that a surge in petrol imports in November resulted from import licensing decisions by the Nigerian Midstream and Downstream Petroleum Regulatory Authority and was not linked to the refinery’s operations.
Dangote Petroleum reaffirmed its commitment to reliable supply, market transparency, and long-term energy security, pledging to collaborate with regulators and industry stakeholders to support domestic refining, conserve foreign exchange, and moderate fuel prices.