The ongoing price war between Dangote Petroleum Refinery and the National Petroleum Corporation of Nigeria (NNPCL) has forced oil marketers to narrow their purchases of fuel as they struggle to mitigate heavy losses due to frequent price adjustments in downstream industries.
Price competition began in November 2024, when the Dangote refinery lowered its former premium automotive spirit (PMS) from ₦990 to 970 liters per liter, eventually cutting it further to February 27, 2025, and finally cutting it further to 825 liters per liter.
In response, NNPCL adjusted its pump price to 860 liters per liter on March 3, 2025, indicating the relentless price among major fuel merchants.
Petroleum marketers, Petroan, Nigeria Petroleum Products Retail Store Owners Association (Petroan) and the Independent Petroleum Marketers Association (IPMAN) have raised concerns over large-scale financial losses, demanding that fuel price adjustments occur every six months to ensure stability.
Talk to Punch, Ipman National Vice President Hammer Fasholaadmits that while Nigerians benefit from lowering prices, instability wreaked havoc on marketers.
“The ongoing price reduction will have a negative impact on oil marketers because we are losing money. If I buy the product at 900 per liter today and the price drops at night, it will be a major problem, especially if the product lasts for a month, He explained.
Fashola confirms that marketers have drastically reduced bulk purchases to minimize risk, increase, increase, increase “Any reasonable marketer takes precautions. If prices continue to fluctuate, everyone will be cautious. However, if prices are stable, businesses will resume normal operations.”
The major energy marketers association (MEMAN) in Nigeria revealed that the landing cost of imported PMS dropped to 774.82 per liter, lower than the ₦825 per liter of Dangote Refinery’s pre-sale price.
This reduction comes after the decline in global crude oil prices, Brent crude fell to $70 a barrel, and as of March 12, 2025, the U.S. WTI crude oil trading price was $66.70 a barrel.
Industry experts suggest that if crude oil drops further to $40 a barrel and Naira puts fuel volume below $1,000, fuel prices could fall to N500 n500 per liter.
Fashola notes that the current price wars are being made to promote healthy competition in the deregulated market.
“The beauty of deregulation is that it encourages competition. As more and more participants enter the market, we expect to lower prices further.” He said.
The Nigerian Bureau of Statistics (NBS) recently reported that Nigeria’s gasoline imports soared 105% in 2024 to a staggering $15.42 trillion, raising concerns about the feasibility of local refineries and the impact of the ongoing price war.
But, Ipman’s vice president said that in addition to preventing monopolies, the increase in fuel imports and low-cost imports are reducing the price of local refueling.
He said “We should not be selfish. We must allow open markets that everyone can participate in. We must also avoid monopoly because we do not want anyone to be inappropriate in the Nigerians.
“If we close the market to refuel imports, we know how the typical Nigerian business will behave. So, imports are allowed to be used as checks and balances. I think why imports should be cheaper than locally refined fuels.”
“In anything you do, there has to be an alternative way to prevent monopolies and make sure no one takes advantage of others. If imports are allowed and someone can introduce fuel at a lower price, then Nigeria’s demand is affordable high-quality fuel. This will drive local refineries to become more competitive and lower prices, because I think imported fuel should be cheaper than local refined products,” IPMAN VP said.
At the same time, the managing director of the financial derivatives company, Bismarck Rewaneit has been pointed out that only if global oil prices continue as witnessed in recent days, the ongoing price war between fuel merchants will continue.
The well-known economist pointed out in an interview with Punch that if global crude oil prices rise again, the price of the product will certainly rise in the country because local producers cannot sell their cost prices below their cost prices.
He said “The price of crude oil determines the price of its refined products. So the only reason the price war will continue is if the price of crude oil drops sharply. Then, we will see gasoline prices drop further. But if the price of crude oil rises again, no one can predict, we will see gasoline prices rising. It’s not in the hands of refineries, but in the global oil market we control.”
He said, explaining why there is a clear competition between Dangote and NNPCL “What do you expect? There must be competition. The way I see them is competition. But only one person can win. Whether there is competition or not, you have to survive to compete. And the only way you can survive is if you are selling at a higher cost than the cost price. As a competitor, pricing is one of the tools of competition. When it is comfortable, they will lower the price in the market share. But when it is uncomfortable, they won’t lower the price.”
