Price war deepens as retailers sell petrol below Dangote’s N739/litre

Retail competition in Nigeria’s downstream petroleum sector intensified over the weekend as several filling stations cut petrol prices below the N739 per litre benchmark linked to supplies from the Dangote Petroleum Refinery.

Market checks showed that some outlets are now selling Premium Motor Spirit (PMS) at prices lower than those offered by MRS Oil, the retailer closely associated with the Dangote refinery’s price reduction initiative. NIPCO sold petrol at N738 per litre, SAO stations at N735, Akiavic at N737, while an AP filling station beside an MRS outlet in Mowe, Ogun State, dispensed fuel at N736 per litre.

The price cuts follow Dangote refinery’s decision in December to reduce its petrol gantry price from about N900 to N699 per litre, with an expected pump price of N739. Since then, importers and depot owners have reported mounting losses, as many have been forced to sell below cost to retain customers.

Retailers operating in the same locations now closely track competitors’ pump prices, adjusting rates to avoid losing patronage. Motorists, in turn, have gravitated toward stations offering the lowest prices, leaving higher-priced outlets with reduced traffic.

Data from the Major Energies Marketers Association of Nigeria indicate that the average landing cost of imported petrol stood at N762.38 per litre, while Dangote’s ex-gantry price remained N699. Despite this gap, marketers importing fuel have still lowered prices to compete with Dangote-backed supplies.

Operators say the cuts are driven by market pressure rather than the relative cost of imported fuel. One marketer, who spoke anonymously, said pricing decisions are aimed at preserving market share in a highly competitive environment.

On December 12, Dangote refinery reduced its gantry price by N129, prompting concerns among marketers that some retailers might keep pump prices high. In response, the President of the Dangote Group, Aliko Dangote, said the company would push for nationwide pump prices not exceeding N740 per litre in December and January.

Initially, the price reduction led to fuel queues at MRS stations in Lagos and Ogun states as motorists avoided outlets selling at higher rates. That trend has begun to reverse, with more stations now undercutting the MRS price.

The Independent Petroleum Marketers Association of Nigeria said price competition is now the main driver of patronage. Its spokesperson, Chinedu Ukadike, warned that marketers who fail to adjust prices risk losing customers while incurring rising bank interest costs on unsold stock.

Meanwhile, Dangote refinery said petrol supply under its marketers’ arrangement began in October 2025 with 600 million litres, rising to 900 million litres in November and 1.5 billion litres in December. The refinery disclosed that since December 16, it has loaded between 31 million and 48 million litres of PMS daily, depending on demand.

To widen access, the refinery reduced minimum purchase volumes to 250,000 litres and introduced a 10-day credit facility backed by bank guarantees. According to the company, these measures have improved distribution, supported smaller operators and increased the use of locally refined petrol.

Addressing a rise in petrol imports recorded in November, the refinery attributed it to import licences approved by the previous leadership of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, noting that the volumes exceeded domestic demand at the time.

The refinery reaffirmed its commitment to stable supply, transparent operations and the development of a competitive downstream market, pledging continued collaboration with regulato6rs and industry stakeholders.