Dangote Petroleum Refinery quietly reduced the loading cost of its petrol from N825 per litre to N815 per litre. This N10 price drop, implemented at its loading gantry, is reshaping the downstream oil sector, intensifying an ongoing price war.
Oil marketers greeted the move with enthusiasm, swiftly pivoting to source products directly from the refinery, bypassing private depot owners. The strategic reduction underscores Dangote’s bid to solidify its grip on market share amid growing competition from imported fuel.
Imported Petrol Landing Costs Plummet
The price adjustment follows a notable decline in the landing cost of imported petrol, which fell to N774.72 per litre on Tuesday. This figure is N50.28 cheaper than Dangote’s N825 per litre gantry rate.
However, by Thursday, the landing cost of imported petrol edged up to N803.35 per litre, according to the Major Energies Marketers Association of Nigeria (MEMAN). Despite this uptick, it remains cheaper than Dangote’s revised ex-depot price, fueling a tussle between refinery and imported products. Industry dealers attribute the volatility to falling crude oil prices, a key driver of fuel production costs.
Deregulation Fuels Competitive Fire
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chief Ukadike Chinedu, hailed the price dynamics as a triumph of deregulation. “There’s speculation that imported products are now cheaper, sparking this price war,” he said. “Dangote holds millions of litres and won’t let external forces erode its market. This forced the price cut.” With retail marketers now favoring cheaper imports, private depots face mounting pressure to lower their rates to stay competitive. The N10 levy imposed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) pushes Dangote’s effective cost to N825 per litre, yet the refinery’s proactive pricing keeps it in the game.
Pump Prices Nearing N800/Litre?
The cascading effect of these reductions has sparked optimism among marketers, who predict pump prices for Premium Motor Spirit (PMS) could soon dip to N800 per litre. “Crude oil is a major component in fuel production,” Ukadike explained. “A further drop in its price would certainly justify lower petrol prices, and N800 per litre is achievable.” This forecast aligns with the landing cost trends and Dangote’s aggressive pricing, though the refinery’s official response remains guarded. An unnamed official, contacted for comment, said, “We don’t have information on the price change as of now, but we’ll clarify tomorrow. Report what marketers told you.”
Strategic Moves in a Volatile Market
The downstream sector’s evolving landscape pits Dangote’s massive output capacity against the agility of imported fuel suppliers. While the refinery’s N815 per litre rate aims to reclaim market loyalty, the N803.35 per litre landing cost of imports, still below Dangote’s adjusted price keeps the competition fierce. Stakeholders see this as a pivotal moment, with deregulation unleashing a free-market battle that could reshape fuel pricing and distribution in Nigeria. As crude oil prices trend downward and refinery output ramps up, consumers may soon reap the benefits of this high-stakes rivalry.
