Dangote’s refinery has ignited a price war in Nigeria’s downstream oil industry, forcing oil marketers to compete aggressively for price-sensitive consumers. Since February, the refinery has cut its petrol prices twice, bringing rates down from N950/litre to N825/litre within five weeks. This move has pushed the state-owned NNPC, the country’s largest petrol supplier, to follow suit with its own price reductions.
Recent movements in global oil prices have significantly influenced Nigeria’s petrol market dynamics. As of March 10, 2025, Brent crude oil prices stood at approximately $69.20 per barrel, reflecting a notable decline from earlier in the year.
This downward trend has been attributed to several factors, including increased oil production from OPEC+ nations and concerns over potential economic slowdowns due to escalating trade tensions.
The U.S. Energy Information Administration (EIA) projects that Brent crude prices will average $74 per barrel in 2025, down from $81 in 2024, primarily due to robust global production growth outpacing demand. Similarly, Goldman Sachs forecasts Brent trading between $70 and $85 per barrel, averaging around $76, with prices influenced by geopolitical developments and supply-demand balances.
These global price shifts have directly impacted Nigeria’s downstream oil sector. The Dangote refinery’s recent petrol price reductions, from N950/litre to N825/litre within five weeks, align with these global trends, compelling the state-owned NNPC to implement similar price cuts to maintain competitiveness.
However, the price war may be more than just market economics. The Dangote Group stated that its latest price reduction was “strategic,” aimed at easing the financial burden on Nigerians ahead of Ramadan and supporting President Bola Ahmed Tinubu’s economic policies. This suggests an element of calculated positioning rather than just cost-cutting.
Critics argue that Dangote’s pricing strategy could eventually lead to monopolistic dominance, similar to his control over the cement and sugar industries. “But there’s no company on earth that is populist for no reason,” Cheta Nwanze, partner at the Lagos-based SBM Intelligence company, told the Financial Times. “There’s always a motive in what they do.
Are we going to see him raise prices when he has conquered the market? We saw it with cement and sugar where he dominates. Remember, Nigeria has one of the highest cement prices in the world. In the long run, for there to be competition, the NNPC would have to get used to competing with Dangote in terms of refining locally.”
The consequences of Dangote’s aggressive pricing strategy are already being felt. Independent fuel importers are struggling, as imported petrol has become uncompetitive.
Chukwudi Iwuchukwu, CEO of Visage Limited, shared the experience of an importer who recently incurred a staggering ₦3 billion loss, unable to sell his stock at a price which allows him to make a profit. With mounting bank loans and dwindling profit margins, independent marketers are grappling with an increasingly uncertain future as domestic refining and the pricing by a $20 billion behemoth reshapes Nigeria’s fuel market.
For Nigerian consumers, cheaper fuel is a welcome development, but the long-term implications of Dangote’s pricing war remain uncertain. If competition fades, prices could rise again once market control is secured. Until then, the battle for Nigeria’s petrol market continues.
Marketers’ Concerns and Calls for Regulatory Intervention
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has expressed significant concerns regarding the abrupt reduction in petrol prices initiated by the Dangote refinery. On February 26, 2025, the refinery slashed its ex-depot price from ₦890 to ₦825 per litre, leading to retail prices of ₦860 in Lagos, ₦870 in the South-West, ₦880 in the North, and ₦890 in the South-South and South-East. This move prompted the Nigerian National Petroleum Company (NNPC) Limited to reduce its retail price from ₦945 to ₦860 in Lagos and adjust prices similarly across other states.
PETROAN President, Billy Gillis-Harry, highlighted the challenges faced by marketers due to these sudden price fluctuations. He noted that purchasing products at higher prices, only to have prices drop before sales are completed, leads to significant financial losses.
Gillis-Harry emphasized the need for a stable market and called on regulatory bodies, such as the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Federal Competition and Consumer Protection Commission (FCCPC), to collaborate with stakeholders to ensure price stability and protect industry players from unpredictable price changes.
The concerns raised by PETROAN underscore the broader implications of Dangote’s pricing strategy on the Nigerian petrol market. While consumers benefit from lower prices, the sustainability of such reductions and their impact on the overall market dynamics remain subjects of active debate.
