Nigeria’s downstream petroleum sector is witnessing a fierce price war following the Dangote Petroleum Refinery’s decision to slash the gantry price of Premium Motor Spirit (PMS) from N828 to N699 per litre.
The move has put fuel importers, depot owners, and retail marketers under severe financial strain, while the refinery itself admits to losses. Analysts estimate importers could lose up to N102.48bn monthly, while Dangote’s refinery might lose N91bn monthly due to the price cut.
The reduction has been welcomed by consumers, especially during the festive season, but marketers holding stocks purchased at higher prices face steep losses. Filling stations are forced to sell below cost, creating winners and losers across the market.
Dangote announced the new N739 per litre pump price at a Sunday press briefing, urging compliance nationwide. Private depots in Lagos have already cut PMS prices by around 14%, with some selling at N710 per litre, while Dangote-linked marketers sell at N703 per litre.
Market figures show Nigeria consumes about 50 million litres of petrol daily, with Dangote refinery supplying 23.52 million litres per day and importers covering the rest. With the new pricing, importers and retailers are expected to incur massive losses on their existing stocks.
Spokesmen from industry bodies, including Chinedu Ukadike of the Independent Petroleum Marketers Association, confirmed the grim outlook for importers whose cargoes are still on the waterways. Billy Gillis-Harry, President of the Petroleum Products Retail Outlet Owners Association, described the reduction as a “big shock” for stations holding large volumes of PMS.
The crisis has also drawn political attention. Dangote accused the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) of sabotaging the economy by issuing import licences despite sufficient local production. The House of Representatives Committee on Petroleum Resources (Downstream) has summoned both Dangote and NMDPRA leadership to resolve tensions.
Despite losses, Dangote insists he will maintain aggressive pricing to challenge importers, citing transportation costs from the refinery at only N15 per litre.
As MRS filling stations begin selling petrol at N739 per litre and private depots continue to follow suit, Nigerians may enjoy temporary relief at the pumps—but the ongoing price war leaves importers, depot owners, and marketers facing massive financial pressure with no clear end in sight.
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