Competition Between Dangote, NNPC Behind Petrol Price Drop – IPMAN

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has credited the recent drop in petrol pump prices to increased competition between Nigeria’s two major refineries, Dangote Refinery and NNPC Limited. The rivalry between the two entities has driven down the ex-depot prices of premium motor spirit (PMS), commonly referred to as petrol, leading to reductions at retail outlets nationwide.

Investigations reveal that many petrol stations have adjusted their pump prices in response to new pricing from the two refineries. For instance, NNPC Retail reduced its price from N1,030 to N965 per litre, while other retailers like AA Rano and AYM Shafa dropped their prices from N1,070 to N1,020 per litre. However, some outlets, such as Conoil, have maintained their previous price of N1,090 per litre.

According to IPMAN’s Public Relations Officer, Chief Chinedu Ukadike, this competitive pricing and the steady availability of fuel have benefited both marketers and consumers. “It is a good development for independent marketers and for consumers too. Normally, prices rise during this period due to increased demand, but now the opposite is happening. The availability of products has led to a price war between NNPC and Dangote,” Ukadike stated.

He added that independent marketers are now experiencing increased turnover and better access to products. With Dangote Refinery lowering the eligibility threshold for bulk purchases from 10 million litres to two million litres, more marketers can now afford to place orders. Similarly, NNPC has opened its portal for marketers to take as much product as needed. This has enabled independent marketers to sell significantly higher volumes compared to when prices hovered around N1,300 per litre.

Looking ahead, Ukadike anticipates further competition and price adjustments when the Warri and Kaduna refineries come online next year. These developments, combined with the operations of the Port Harcourt Refinery and Dangote Refinery, are expected to significantly impact Nigeria’s fuel market and foreign exchange dynamics by 2025. The refineries have a combined processing capacity of 620,000 barrels per day, reducing Nigeria’s reliance on imported petroleum products.

Dr. Muda Yusuf, Director/CEO of the Centre for the Promotion of Private Enterprise (CPPE), expressed optimism about the long-term effects of the refineries on Nigeria’s economy. In his outlook, he noted that the substitution of imported fuels with locally refined products would ease pressure on the forex market.

Meanwhile, oil marketers continued adjusting pump prices over the weekend, following ex-depot prices set by NNPC Limited and Dangote Refinery at N899 and N899.50 per litre, respectively. Stations affiliated with both refineries, such as NNPCL and MRS, have already implemented these new prices, signaling the ongoing evolution of Nigeria’s fuel market dynamics.