Dangote Price Cut Triggers Price War In Downstream Oil Sector
By Alofe Ayomoses
A major price war has broken out in Nigeria’s downstream petroleum sector following a sharp reduction in the gantry price of Premium Motor Spirit by the Dangote Petroleum Refinery.
The refinery recently slashed its ex depot price of petrol from N828 to N699 per litre, a move that has unsettled fuel importers, depot owners and retail marketers across the country.
Industry sources said the sudden price adjustment has exposed several operators to heavy financial losses, even as Dangote Refinery itself admitted that the decision would significantly reduce its revenue in the short term.
Market estimates showed that petrol importers could lose up to N102.48 billion monthly if the new pricing regime persists, while the Dangote refinery is projected to forfeit about N91 billion within the same period due to reduced margins.
Although consumers have welcomed the price drop as a relief, especially during the festive season, many filling station operators said they were forced to sell existing fuel stocks bought at higher prices at a loss.
Energy analysts noted that the development has exposed deep competition within the deregulated petroleum market, with pricing now driven largely by market forces rather than regulation.
Last Friday, the Dangote refinery announced a N129 per litre reduction in its petrol gantry price, assuring Nigerians of steady supply throughout the Yuletide. The company also introduced a 10 day credit facility for marketers, with the new price effective from December 12.
Speaking during a media briefing on Sunday, President of the Dangote Group, Aliko Dangote, said petrol must sell at N739 per litre nationwide from Tuesday. He added that MRS filling stations had already begun selling at the new rate, while other partner outlets were expected to comply.
In response, fuel importers and private depot owners have been forced to slash prices to remain competitive, further deepening losses across the supply chain.
Findings showed that several private depots in Lagos reduced their petrol prices by about 14 per cent within days of Dangote’s announcement, with many now selling PMS at about N710 per litre, compared to N828 per litre the previous week.
Data revealed that MENJ depot reduced its PMS price from N828 per litre on December 8 to N710 by December 15. Integrated and Bovas depots also cut prices from N826 to N710 per litre, while A A Rano depot dropped from N829 to N710 per litre.
At the Dangote depot, PMS sold at N702.5 per litre, while Automotive Gas Oil was priced at N916 per litre and Liquefied Petroleum Gas at N815 per litre. Pinnacle depot sold PMS at N710 per litre and AGO at N941.
Further checks showed that Menu and Bovas depots aligned their PMS prices at N710 per litre. Matrix depot sold PMS at N800 per litre, while Rainoil sold at N803 per litre, with some depots focusing mainly on diesel and cooking gas sales.
| Depot | Previous PMS Price | New PMS Price |
| MENJ | N828 | N710 |
| Integrated & Bovas | N826 | N710 |
| A A Rano | N829 | N710 |
| Dangote | N828 | N702.5 |
| Pinnacle | – | N710 |
| Matrix | – | N800 |
| Rainoil | – | N803 |
In the diesel segment, NIPCO sold AGO at N930 per litre, Duport at N944, Ibachem at N930, while African Terminal and Gulf Treasure sold at N944. Bono depot recorded the highest AGO price at N945 per litre.
Figures from the Nigerian Midstream and Downstream Petroleum Regulatory Authority showed that Nigeria consumes an average of 50 million litres of petrol daily, translating to about 1.5 billion litres monthly.
The data indicated that Dangote refinery supplies about 23.52 million litres daily, or 705.6 million litres monthly, while importers provide about 26.48 million litres daily, amounting to 794.4 million litres monthly.
A report by the Major Energies Marketers Association of Nigeria put the landing cost of petrol at N828 per litre as of December 12, meaning importers are selling at about N129 above Dangote’s price.
Market analysts warned that if pressure continues, depot owners may be forced to sell at Dangote’s price, resulting in estimated losses of N129 per litre, equivalent to about N3.41 billion daily and N102.48 billion monthly for importers, while the refinery itself could lose over N91 billion in one month based on current supply levels.
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