A fierce fuel price war between the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery has led to a sharp reduction in the pump price of Premium Motor Spirit (PMS), commonly known as petrol, across the country. The price cut, seen as a response to Dangote’s initial reduction, has raised concerns among stakeholders, who fear anti-competitive practices may destabilize the downstream petroleum sector.
On Monday, NNPCL slashed petrol prices at its retail outlets, reducing the pump price from N945 per litre to N860 in Lagos and N865 in Abuja. This move follows Dangote’s recent decision to lower fuel prices, leading analysts to suggest that both players are now operating at a loss in a bid to dominate the market. Reports from across the Federal Capital Territory (FCT) and Lagos indicate that NNPCL stations, including those in Ori-Oke, Egbe, Ikoyi, and Ikorodu Road, have already implemented the price cut, drawing customers away from independent marketers.
Despite the price reductions, the Independent Petroleum Marketers Association of Nigeria (IPMAN) revealed that many of its members, having purchased fuel at higher costs, are struggling to keep up. Though some have reduced their prices to stay competitive, their outlets are reportedly being deserted for NNPCL and MRS stations, where fuel is now cheaper.
While NNPCL has not officially explained the rationale behind its price slash, industry experts believe it is an attempt to ease financial burdens on consumers and reclaim market share. However, energy expert Professor Wunmi Iledare has raised concerns about the implications of a duopoly, where only NNPCL and Dangote dictate market trends. He criticized the government’s reliance on imported fuel for price competition, warning that this could destabilize the foreign exchange market and weaken Nigeria’s economic foundation.
“The NNPC is using imported products to compete against Dangote, rather than leveraging its refineries. This approach affects the stability of the exchange market and has unintended consequences for the macroeconomic system,” Iledare noted.
Further complicating the situation, Dangote Refinery has reportedly absorbed N16 billion in losses by offering N65 per litre refunds to fuel marketers who bought at higher rates, ensuring continued affordability for Nigerians. Some analysts believe Dangote’s pricing strategy is aimed at clearing existing stock while reinforcing its position as a dominant supplier in Nigeria’s fuel market.
Professor Adeola Adenikinju, President of the Nigerian Economic Society (NES), has urged regulators to monitor the ongoing price war closely to prevent unfair market practices. He emphasized the need to guard against strategies aimed at driving competitors out of business in the short term, only to raise prices once market control is secured.
“They must ensure that no single entity is attempting to dominate the market through predatory pricing. The fair price for petrol should be assessed within a reasonable range,” Adenikinju advised.
Similarly, Hammed Fashola, National Vice President of IPMAN, welcomed NNPC’s price reduction, describing it as a temporary relief for Nigerians. He acknowledged that many marketers had adjusted their prices despite purchasing stock at higher costs and noted that Dangote had assured potential refunds to affected marketers.
Meanwhile, the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), represented by Billy Gillis-Harry, confirmed that official details on NNPC’s price adjustment were yet to be communicated.
Energy law expert Dr. Ayodele Oni attributed the price war to natural market forces, arguing that businesses often lower prices to capture market share, improve efficiency, and enhance supply chains. However, he cautioned that the government must ensure competition remains fair and sustainable.
Professor Segun Ajibola, an economist and former President of the Chartered Institute of Bankers of Nigeria (CIBN), predicted that fuel prices would drop further as Dangote scales up production and more private refineries enter the market. He projected that, within five to ten years, fuel prices could return to pre-May 2023 levels, provided local refining capacity expands.
“This is just the beginning. As more private investors establish refineries, fuel prices will become more stable. NNPC must adapt by improving operational efficiency and eliminating corruption,” Ajibola asserted.
He also commended the government for allowing market competition, stating that while the current price war may create instability, consumers ultimately benefit from the affordability it brings. However, he cautioned that long-term sustainability should remain a priority to avoid price volatility and economic distortions.
As the price battle between NNPCL and Dangote intensifies, analysts warn that regulatory oversight will be critical in ensuring market stability, fair pricing, and long-term efficiency in Nigeria’s evolving petroleum sector.
