Many operators in the petroleum sector have been forced to sell petrol at rates below their costs, in reponse to Dangote refinery slashing petrol pump prices from about N900 to N739 in December.
This has deepened the price war which many say was started by the Dangote refinery.
As at the time of reporting, some retail outlets have dropped the prices of Premium Motor Spirit (petrol) below the N739 per litre recommended by the Dangote Petroleum Refinery to their partners like MRS Oil, who has been selling at N739 per litre.
As of Sunday, NIPCO sold PMS at N738 per litre, SAO filling stations sold it at N735, while Akiavic offered the product at N737. An AP filling station beside an MRS outlet in Mowe, Ogun State, dropped its price to N736 per litre.
Filling stations across key areas are now intensely tracking each other’s pump prices in real time to avoid losing ground, a direct response to the aggressive pricing sparked by Dangote Petroleum Refinery.
Motorists are flocking to outlets with the lowest rates, often leaving higher-priced stations with dwindling customers and empty forecourts.
The spokesperson for the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, said marketers who refused to reduce prices would lose customers as bank interest charges accumulate.
“We are in a situation where competition can be determined by price. Patronage will be determined by pricing. Nobody is against you; nobody is regulating you. You will regulate yourself. The market will regulate itself. The time has gone when people were queuing at NNPC filling stations. Wherever the fuel is cheap, that is where the marketers go. So, we are in a price war. Demand and supply determine the price,” Ukadike said.
He added that once Dangote reduced the gantry price to N699, marketers would move towards competitive pricing to retain customers; “if not, interest from banks would be ‘eating’ your capital.”
Industry watchers say the intensifying price war could reshape the downstream market, as smaller and debt-burdened operators struggle to stay afloat. While motorists benefit from lower pump prices in the short term, sustained losses may force some retailers to scale back or shut down.
Analysts note that the situation could also drive consolidation across the sector. Much will depend on how long aggressive pricing continues.
For now, competition remains firmly price-driven.
