Marketers Abandon NNPCL as Price War with Dangote Refinery Intensifies

Oil marketers in Nigeria are increasingly distancing themselves from the Nigerian National Petroleum Company Limited (NNPCL) franchise as competition intensifies in the downstream sector. Many filling stations, particularly in Lagos and its environs, are removing the NNPCL branding and switching to independent identities, driven by the lower cost of refined petroleum products from the Dangote Petroleum Refinery.

Reports indicate that some dealers along the Lagos-Ibadan expressway, including Wawa and Ibafo, have already rebranded their stations, prioritizing affordability and profitability in the newly deregulated market. More marketers are expected to follow suit, as the Dangote refinery’s reduced loading costs make it a more attractive supplier than NNPCL.

The price war escalated after Dangote Petroleum Refinery slashed its ex-depot petrol price from N950 to N890 per litre, undercutting the landing cost of imported petrol. Marketers see rebranding as a way to access these cheaper products, a move confirmed by the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike. He explained that marketers initially partnered with NNPCL to secure product supply, but with deregulation and increased competition, they are now exploring better alternatives.

Further complicating matters, industry analysts highlight that NNPCL’s role as the dominant importer of petrol diminished after the removal of fuel subsidies. Previously, marketers paid millions for NNPCL franchise licenses, allowing them to obtain petrol at subsidized rates. However, with the emergence of the Dangote refinery, this advantage has faded, prompting many to seek direct deals with new suppliers.

Olatide Jeremiah, CEO of petroleumprice.ng, confirmed that the shift was inevitable. He noted that NNPCL previously influenced pump prices in collaboration with major marketers, ensuring stable but unsustainable rates. When independent marketers began incurring losses due to higher import costs, they sought franchise agreements with NNPCL. However, the entry of the Dangote refinery disrupted this arrangement, as it offered a more competitive and direct supply chain.

Akinola Ogunyolemi, Chairman of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) in Lagos, added that most rebranded stations were never owned by NNPCL. Instead, they were independent businesses operating under franchise agreements, which many marketers are now terminating in favor of better offers.

The situation remains fluid, as imported petrol remains costlier than Dangote’s locally refined product. According to data from the Major Energies Marketers Association, the landing cost of imported petrol has risen to N910.14 per litre at ASPM and N910.52 at NPSC depots, compared to Dangote’s lower ex-depot price.

Meanwhile, Dangote Petroleum Refinery attributed its price reduction to favorable global energy market conditions and a drop in international crude oil prices. Brent crude, which was traded at $81 per barrel in early January, had fallen to $76.76 by early February.

Industry sources indicate that the competition is far from over. Some major marketers and NNPCL are reportedly sourcing cheaper refined products from alternative international suppliers, challenging Dangote’s pricing advantage. This move has led to speculation that further price reductions or strategic shifts in supply agreements may emerge in the coming months.

As deregulation continues to reshape Nigeria’s petroleum sector, the battle for market dominance between NNPCL, Dangote, and independent marketers is expected to intensify, ultimately influencing pump prices and supply dynamics across the country.