The competition in Nigeria’s downstream oil sector has reached new heights as the Nigerian National Petroleum Company Limited (NNPCL) may consider reducing petrol prices to keep up with Dangote Refinery’s recent price slash.
Naijaonpoint reports that this move follows MRS filling station’s announcement of a pump price reduction, in collaboration with Dangote Refinery, which has sparked a price war in the market.
With consumers closely watching, industry experts believe NNPCL has little choice but to adjust its pricing strategy to maintain its dominance in the sector.
Speaking to DAILY POST, the National President of the Petroleum Products Retail Outlet Owners Association, Billy Gillis-Harry, and the spokesperson for the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, expressed confidence that NNPCL will be compelled to lower its prices soon to maintain its market relevance.
MRS Slashes Petrol Prices, Forces NNPCL’s Hand
On Monday, MRS filling stations announced new petrol prices via their official X account, revealing a significant drop to ₦925 per litre in Lagos, ₦933 in the South West, ₦945 in the North, and ₦955 in the South East.
This marks a decrease from the previous average price of ₦970 per litre.
This price cut follows Dangote Refinery’s decision on February 1, 2025, to lower its ex-depot price from ₦970 to ₦870 per litre.
Industry experts believe NNPCL has no choice but to respond with a similar price reduction.
Gillis-Harry said that “NNPC has no choice but to reduce petrol retail prices because it is not possible to see a product at a cheaper price and still go for NNPCL.”
Ukadike also emphasized that the ongoing price battle between Dangote Refinery and NNPCL makes a price cut from the latter inevitable.
“It is likely that NNPCL will drop its price because there is a price war with Dangote Refinery. Once Dangote Refinery announces a price drop, NNPC will follow suit,” he said.
Why Petrol Price Cuts Haven’t Lowered Transportation Costs
Despite the reductions at MRS filling stations, transport fares and food prices remain unchanged.
According to Gillis-Harry, Nigeria’s weak purchasing power is a key factor preventing these price cuts from significantly impacting daily expenses.
He suggested that boosting local production in sectors such as agriculture, fishing, and technology is necessary for economic relief
“If you watch, the cost of transportation has not reduced in spite of the reduction of fuel at the retail market. That tells you that the purchasing power of Nigerians is very weak.
“In my opinion, we need to engage Nigerians in production activities such as farming, fishing, and technology.
“Go to the park, you will see that the price of transportation cost has not been impacted by the fuel reduction,” hGillis-Harry explained.
Ukadike, however, remains optimistic that the effects of lower petrol prices will be felt gradually.
“The impact will be gradual; it will eventually impact transportation and others,” he noted.
Concerns Over Frequent Fuel Price Adjustments
Gillis-Harry raised concerns about the frequent fluctuations in petrol prices, warning that it could disrupt fuel supply security.
He highlighted that sudden price cuts negatively affect marketers who had purchased stock at higher rates.
“There was a lot of fuel that was purchased at the old price that is still in the system, and they have not been sold.
“Marketers cannot sell below the cost price. It is completely impossible for someone to buy a product at ₦970 per litre and sell below the purchase price.
“MRS that is trying to deepen the distribution process with PETROAN and Dangote Refinery still has the same challenge of the buying power,” he noted.
Even MRS, despite its partnership with Dangote Refinery and PETROAN, faces challenges due to weak consumer purchasing power, he added.
The Battle for Market Control Continues
The ongoing rivalry between NNPCL and Dangote Refinery has been a key driver of petrol price reductions since late 2024.
Last December, Dangote Refinery reduced its ex-depot price from ₦899.50 to ₦970, prompting NNPCL to follow suit with its own price cut.
With competition between these industry giants heating up, the coming weeks will reveal whether NNPCL will take further steps to maintain its foothold in Nigeria’s fuel market.