Nigeria’s downstream oil market is witnessing an intensifying pricing showdown, as a sharp drop in the landing cost of imported petrol sends ripples across the industry. With imported Premium Motor Spirit (PMS) now costing as low as ₦774.92 per liter, oil marketers are re-strategizing their sourcing, price offerings, and supply routes in a bid to stay competitive—setting the stage for what could become the most heated price battle in the sector since deregulation. As such, marketers are hopeful that the price of fuel will continue to decline to about ₦800 per liter.
The new dynamic is already challenging Dangote Petroleum Refinery’s position, which had previously cut its ex-depot gantry price to ₦825 per litre in an effort to gain market share. However, the recent cost reduction in petrol imports—down by ₦152.56 or 16.5 percent from ₦927.48 per litre as of February 21, 2025—is significantly tilting the scale. With the import parity price now resting at ₦774.92 per liter, major and independent marketers alike are finding imported fuel more attractive than Dangote’s offering, especially given the tight profit margins from the refinery’s supply.
Falling crude prices push marketers toward imported fuel.
Private depots across the nation are feeling the full effects of this pricing evolution. Retailers are now sourcing petrol at ₦830–₦832 per litre from outlets such as AA RANO, MRS TINCAN, AITEO, and RAINOIL—undercutting Dangote’s ₦835 depot price. Notably, some depots are selling even below Dangote’s coastal price of ₦780 per litre. These alternative sources are not only cheaper but also more logistically viable, as marketers continue to lament the high cost of transporting petrol from the Dangote Refinery in Lekki, which adds between ₦40–₦45 per litre in delivery charges.
Earlier in the year, NNPC slashed its pump price from ₦945–₦965 per litre down to ₦860–₦880 per litre, seemingly in response to Dangote’s price cut. But the recent shift in import economics is forcing marketers to lean more heavily on offshore purchases, where the current international price of Brent Crude has fallen to $70.36 per barrel and the U.S. WTI sits at $66.70—down from February averages of $76 and $69 respectively. This drop, coupled with a slightly stabilizing exchange rate of ₦1,517.24 per U.S. dollar, has further reduced the cost of importing fuel.
Competition intensifies as petrol prices are projected to drop.
This has fueled increased competition, and industry experts project that petrol prices could drop further, possibly reaching ₦800 per litre or even lower if current trends continue. According to energy analyst Olatide Jeremiah, more marketers are likely to shift away from Dangote and embrace private depots for price consistency and margin sustainability. He added that Dangote Refinery may have to consider revising its ex-depot prices if it intends to remain competitive in a market that is rapidly turning to imports.
Meanwhile, marketers with old Dangote stock purchased at higher rates are now facing the grim reality of selling at break-even points—or incurring outright losses—just to stay afloat. This has sparked concerns within the refinery’s distribution chain and raised new questions about the refinery’s pricing strategy and its capacity to withstand open market pressures. This wave of competition, while destabilizing in the short term, could ultimately serve consumers better in the long run. With more suppliers fighting for market relevance, the downward pressure on petrol prices may intensify, offering relief to millions of Nigerians already burdened by high fuel costs.
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However, the long-term implication also hinges on whether local production from Dangote can scale efficiently to meet demand at competitive prices, or whether the country will continue to rely heavily on cheaper, imported petrol. The blend of increased competition, flexible sourcing strategies, and global pricing shifts may finally unlock the kind of pricing flexibility that Nigerian motorists have long awaited. As the price war heats up, all eyes remain fixed on the next move—particularly from Dangote Refinery. Will it adjust prices again to match the new reality? Or will importers continue to dominate the supply chain in a market that is quickly shifting toward price-driven sourcing?