In what appears as retaliation against initial price reduction by Dangote Refinery, the Nigerian National Petroleum Company Limited (NNPCL), yesterday, slashed the pump price of Premium Motor Spirit (PMS), commonly known as petrol, from N945 per litre to N860 per litre in Lagos and N865 in Abuja.
This came as stakeholders insisted that unless there is a strong regulatory intervention to discourage what they described as oligopoly, the downstream segment of the nation’s petroleum industry might face serious structural and market consequences, reports The Guardian.
They noted that both NNPCL and Dangote were already running at a loss in an attempt to claim market share.
NNPCL’s retail outlets in Ori-Oke, Egbe, Ikoyi, and along Ikorodu Road in Lagos as well as others across major areas of the Federal Capital Territory (FCT), including Lugbe and Ketampe already adjust their pump prices downward.
Although the Independent Petroleum Marketers Association of Nigeria (IPMAN) stated that many of their members had reduced their prices despite purchasing stock at higher rates, absorbing losses to remain competitive, their stations are being deserted for MRS and NNPCL.
Although NNPCL has not officially explained the price cut, industry analysts suggest it is a response to market pressures and an attempt to ease the financial burden on Nigerians.
Energy expert, WunmiIledare, criticised the state of the PMS wholesale market, describing it as anti-competitive. Iledare noted that two dominant players, NNPCL and Dangote, were engaging in inter-dependent pricing, a hallmark of an oligopoly. He argued that market efficiency is not solely about lower prices but also about sustainability, warning that relying on imported products rather than refining locally undermines long-term economic stability.
“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.
Stakeholders revealed that Dangote and NNPCL are selling fuel at a loss in Nigeria.
Some analysts also told our correspondent that Dangote reportedly front-loaded sales to clear existing stock. Dangote had announced that it would absorb N16 billion in losses by refunding N65 per litre to marketers, ensuring Nigerians benefit from lower fuel prices.
Energy expert and President of the Nigerian Economic Society (NES), Prof Adeola Adenikinju, said the regulators must ensure the viability and efficiency of the market. He noted the need to guard against unfair competition and against the exercise of market power by operators.
“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.
National Vice President of IPMAN, Hammed Fashola, welcomed NNPC’s price reduction, calling it a relief for Nigerians. He confirmed that many marketers had begun selling at lower prices despite having full stock purchased at higher rates.
According to him, Dangote has assured marketers, who picked up stock from MRS, Ardova and Heyden within the pricing adjustment period, that they might be refunded.
Fashola added: “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. Efforts to reach NNPC spokesperson, Femi Soneye, for comments were unsuccessful at the time of filing this report.
Similarly, the National President of Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, stated that he had not yet received official details on NNPC’s revised pump price.
Dr Ayodele Oni, an energy partner at Bloomfield, attributed the price war to natural market competition. He explained that businesses often lower prices to expand market share, improve efficiency, or source cheaper supplies.
Professor of Economics at Babcock University and former President of Chartered Institute of Bankers of Nigeria (CIBN), Segun Ajibola, predicted that fuel prices would drop further once Dangote fully harnesses economies of scale 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 added that NNPCL must adapt to this competitive landscape by improving efficiency and eliminating corruption. He commended the government for not shielding NNPCL from competition, arguing that the price war ultimately benefits Nigerians by making fuel more affordable.
