The price war in Nigeria’s downstream petroleum sector has intensified, with several retail outlets slashing the pump price of Premium Motor Spirit (PMS) below the ₦739 per litre benchmark recommended by the Dangote Petroleum Refinery.
According to Punch, some filling stations now dispense petrol at prices lower than those of MRS Oil, the major retail partner endorsed by the Dangote refinery to implement the ₦739 per litre regime.
During a survey over the weekend, it was observed that NIPCO sold petrol at ₦738 per litre, SAO stations offered it at ₦735, while Akiavic sold at ₦737 per litre. An AP filling station located beside an MRS outlet in Mowe, Ogun State, also dropped its price to ₦736 per litre.
Industry players said filling stations operating within the same locations now closely monitor one another’s pump prices to avoid losing customers in the increasingly competitive market.
Motorists, our correspondent observed, have continued to patronise stations with the lowest prices, leaving outlets selling at higher rates struggling to attract customers.
The Major Energies Marketers Association of Nigeria disclosed that the landing cost of imported petrol currently averages ₦762.38 per litre, while Dangote’s ex-gantry price stands at ₦699 per litre.
Despite this margin, importers and depot owners have adjusted pump prices downward to compete with Dangote-backed MRS outlets, even as both sides reportedly record losses running into billions of naira.
An operator, who spoke on condition of anonymity, told Punch that the price cuts were driven purely by competition.
“This is not a function of whether imports are better or not, but simply a market strategy to get a good share of the market. However, it needs to be stressed that we are not at war with any marketer or depot operator nor any refinery,” he said.
The current situation followed a major price adjustment on December 12, when the Dangote refinery reduced its petrol gantry price by ₦129, from ₦828 to ₦699 per litre.
Shortly after, the President of the Dangote Group, Aliko Dangote, accused some marketers of planning to keep pump prices high despite the reduction and vowed to enforce the new pricing regime nationwide.
“We are going to use whatever resources we have to make sure that we crash the price down. For December and January, we don’t want people to sell petrol for more than ₦740 nationwide,” Dangote had said.
Following the directive, MRS stations in Lagos and Ogun states began selling petrol at ₦739 per litre, leading to queues as motorists boycotted outlets with higher prices.
‘Market Will Regulate Itself’ – Ukadike
Reacting to the ongoing competition, the spokesperson for the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, said price competition was inevitable in a deregulated market.
“We are in a situation where competition can be determined by price. Patronage will be determined by pricing. Nobody is regulating you; the market will regulate itself,” Ukadike said.
He warned that marketers who fail to adjust prices risk losing customers and seeing their capital eroded by bank interest charges.
“Once Dangote reduced the gantry price to ₦699, marketers had no choice but to move towards competitive pricing. If not, interest from banks will be eating your capital,” he added.