NNPCL-Dangote price war: Oil marketers slash purchase amid losses
As the price war in the downstream oil sector continues leading to recurring reductions in the price of Premium Motor Spirit commonly known as petrol, oil marketers have resorted to slashing the volume of their fuel purchase amid mounting losses from the price drop.
The price war, primarily between Dangote Petroleum Refinery and the Nigerian National Petroleum Corporation Limited, began in November 2024 when the Africa’s largest private refinery lowered the price of petrol from N990 to N970 per litre.
Dangote further reduced it to N899 per litre, citing the need to provide relief for Nigerians during the holiday season.
Days after Dangote’s move, NNPCL also slashed its ex-depot price of the product from N1,040 to N899 per litre, according to the Petroleum Products Retail Outlets Owners Association of Nigeria.
On February 1, 2025, Dangote Refinery again reduced the petrol price to N890 per litre before further lowering it to N825 per litre on February 27, setting the stage for continued pricing competition with NNPCL.
In a statement signed by its Group Chief Branding and Communications Officer, Anthony Chiejina, the refinery said the price adjustment was a direct response to the positive outlook within the global energy and gas markets and the recent reduction in international crude oil prices.
However, on March 3, 2025, some NNPCL retail outlets reported that the oil firm had also adjusted its petrol pump price to N860 per litre, reflecting the intense price war among fuel merchants.
According to stakeholders in the downstream sector, the frequent price reductions, signaling the ongoing price war between Dangote Refinery and NNPCL, have been beneficial to Nigerians.
However, energy experts argue that the continuous decline in PMS prices has been causing significant losses for oil marketers and importers, who lose an average of N2.5bn daily and N75bn monthly.
Amid mounting losses, oil marketers under PETROAN have called for a regulation mandating that fuel prices be adjusted only every six months, but it remains uncertain whether the regulatory body will approve the demand.
Speaking with Sunday PUNCH, the National Vice President of IPMAN, Hammed Fashola, said that while the price war has benefited Nigerians, the unpredictability of fuel price reductions is forcing oil marketers to cut their purchases, leading to significant daily losses.
He said, “The ongoing price reduction is affecting oil marketers negatively because we are losing money. For instance, if I buy products at N900 per litre today and the price drops by evening, you can see the problem, especially if the product is meant to last a month. That is the challenge marketers are facing now.
“Not buying large volumes of PMS is the only way to play it safe because when you buy in bulk, the price may drop again, which is exactly what is happening now. For all marketers, that is the reality we are dealing with.
“We just need to be careful when making purchases. We must equip ourselves with adequate information by understanding global market trends before buying. And we will only purchase products we are confident can be sold within a week.”
When asked if marketers had begun reducing their purchase volumes, the IPMAN VP said, “Of course. Any reasonable person would do that to minimise losses. Our people have already started. It is just a precautionary measure. How long this will last depend on the situation. If the price stabilises, everyone will relax and return to normal business. But if it remains unstable, there will always be the fear that prices could drop at any time. So, everyone would rather be cautious. It is about avoiding excessive losses. However, this practice might not last long, as it is only a short-term measure.”
In yet another price change, the landing cost of PMS on Tuesday dropped to N774.82 per litre, making it cheaper than Dangote Refinery’s ex-depot price of N825 per litre.
