Nigerians Benefit from Subsidized Fuel as NNPC and Dangote Compete in Price Cuts
Regulatory bodies urged to intervene as concerns over anti-competitive tactics grow
In response to Dangote Refinery’s recent price reduction, the Nigerian National Petroleum Company Limited (NNPCL) has also lowered the price of Premium Motor Spirit (PMS), or petrol, from N945 per litre to N860 per litre in Lagos and N865 per litre in Abuja. This move appears to be a direct counter to Dangote’s earlier price cuts.
Industry players are calling for stronger regulatory oversight to prevent what they see as an emerging oligopoly in the Nigerian petroleum market, which could lead to significant market disruptions. They warned that both NNPCL and Dangote Refinery are incurring losses in their competition for market share, with NNPCL’s retail outlets in locations such as Ori-Oke, Egbe, Ikoyi, and Ikorodu Road in Lagos, as well as various stations in the Federal Capital Territory (FCT), adjusting prices downward.
Although the Independent Petroleum Marketers Association of Nigeria (IPMAN) reported that many of its members have also reduced prices despite purchasing stock at higher rates, they noted a drop in customers at their stations in favor of NNPCL and MRS.
While NNPCL has not formally explained its price reduction, market analysts suggest it is an effort to respond to the competitive pressure and help ease the financial burden on consumers. Energy expert Wunmi Iledare criticized the current state of the wholesale PMS market, calling it anti-competitive. He pointed out that with just two dominant players—NNPCL and Dangote—the market is showing signs of interdependent pricing, a classic feature of an oligopoly. Iledare argued that while lower prices are beneficial in the short term, market sustainability is vital for long-term economic stability, particularly as Nigeria continues to rely on imported fuel rather than utilizing its domestic refineries.
“It’s problematic that NNPCL is competing with Dangote using imported products, rather than leveraging its own refineries. This not only affects the exchange rate but also has negative implications for the broader economy,” Iledare explained.
Sources revealed that both Dangote and NNPCL are selling fuel at a loss, with Dangote reportedly clearing out existing stock at a significant loss. The company is said to be absorbing losses of up to N16 billion by refunding N65 per litre to marketers in order to ensure lower prices at the pump for Nigerians.
Professor Adeola Adenikinju, President of the Nigerian Economic Society (NES), called for regulatory bodies to ensure that the market remains viable and efficient. He warned against unfair competition and the potential dominance of any single player, urging regulators to assess whether fuel prices remain within an acceptable range that benefits the public.
IPMAN’s National Vice President, Hammed Fashola, welcomed the price reduction from NNPC, calling it a relief for Nigerians. He confirmed that several marketers had already adjusted their prices, despite having purchased stock at higher costs, and that Dangote had assured them of a refund for the price difference.
“While NNPC’s retail stations are now selling petrol at N860 per litre, the new prices have yet to be updated on the official portal,” Fashola noted. Attempts to reach NNPC’s spokesperson, Femi Soneye, for comment were unsuccessful at the time.
Billy Gillis-Harry, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, also stated that he had not received official communication regarding the price adjustment from NNPC.
Energy expert Dr. Ayodele Oni, from Bloomfield, attributed the ongoing price cuts to natural market dynamics. He explained that companies often lower prices to gain market share, enhance efficiency, or
