Nigeria’s downstream petroleum sector is in the middle of what operators describe as an intense price war following the decision by the Dangote Petroleum Refinery to sharply reduce its gantry price for Premium Motor Spirit from N828 to N699 per litre. The move has forced fuel importers, depot owners and retail marketers to cut prices aggressively, even as the refinery admits it is also losing money under the new price regime.
Estimates based on consumption and supply data suggest that petrol importers could lose about N102.48bn every month if they match Dangote’s prices. With the refinery now selling N129 per litre cheaper than the prevailing import landing cost, analysts say depot owners who offload cargo at Dangote-level prices would be taking a loss of about N129 on every litre sold, amounting to roughly N3.41bn daily. Dangote Refinery itself is projected to forgo about N91.02bn per month as a direct result of its price cut, given its current output.
According to figures from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Nigeria consumes around 50 million litres of petrol per day, translating to about 1.5 billion litres monthly. Of this volume, Dangote Refinery supplies about 23.52 million litres daily, or 705.6 million litres per month, while importers provide the remaining 26.48 million litres per day, equivalent to 794.4 million litres monthly.
The latest price reduction came after Dangote earlier guaranteed that Nigeria would have enough petrol during the festive season and introduced a 10-day credit window for marketers. At a Sunday briefing, Dangote Group President, Aliko Dangote, vowed to enforce a new pump price of N739 per litre nationwide starting Tuesday, saying MRS outlets would lead the rollout with other partner stations expected to follow.
Many Nigerians have welcomed the lower prices as a much-needed relief during the Yuletide period. However, marketers say they are facing heavy losses because they must sell existing stock purchased at higher prices below cost as cheaper products from Dangote enter the market. The situation has exposed fault lines in the deregulated regime, with consumers gaining while many operators struggle to stay afloat.
Market checks compiled from Petroleumprice.ng show that private depots in Lagos have already slashed PMS prices by about 14 per cent in response to the new Dangote rate. Several major depots that previously sold around N828 per litre are now offering petrol at N710, while Dangote-linked marketers are selling close to N703 per litre, forcing competitors to adjust or risk slow sales and unsold stocks.
At MENJ depots, PMS prices dropped from N828 to N710 between December 8 and December 15, a reduction of N118 per litre. Integrated and Bovas depots lowered prices from N826 to N710, while A.A. Rano recorded one of the steepest cuts, moving from N829 to N710, a N119 drop in less than a week.
Dangote Depot was selling PMS at about N702.5 per litre, with diesel (AGO) at N916 and cooking gas (LPG) at N815 per litre. Pinnacle Depot offered PMS at N710 and AGO at N941, while Menu and Bovas aligned their petrol prices at N710 per litre. Matrix Depot was still at N800 per litre for PMS, and Rainoil sold at about N803, with several depots focusing more on diesel and LPG sales.
In the diesel market, NIPCO sold AGO at N930 per litre, Duport and some others around N944, and Bono Depot posted the highest diesel price at N945 per litre. Overall, the average 14 per cent reduction in Lagos depot petrol prices is attributed largely to competitive pressure from the Dangote refinery’s aggressive pricing strategy.
Speaking on the impact, spokesperson of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, warned that importers, especially those with cargo still offshore, face severe financial stress. He estimated that filling stations could lose more than N80bn as they would be forced to sell high-cost stock below cost once the cheaper products spread nationwide.
Ukadike said marketers had long expected some benefit from local refining and stabilising exchange rates, and welcomed the lower prices as a positive development for consumers. At the same time, he acknowledged that anyone who bought at about N828 per litre would “lick their wounds” as prices drop towards N750 per litre at the pump.
He suggested that Dangote Refinery consider compensating marketers who bought at the older, higher rates, possibly through discounts on future purchases. However, Dangote insisted that the refinery itself is also taking a major hit, disclosing that it lost about N60bn in November after a smaller N49 per litre gantry price reduction.
Dangote said he is not “printing money” and is also losing funds each time he cuts prices. He accused some players of wanting fuel imports to continue so they can keep dumping imported petrol, and argued that his N20bn investment is “too big to fail,” adding that the sector is now in a “cat and mouse” contest where either the refinery or the importers will eventually back down.
President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, described the N129 per litre cut as a major shock for retailers who still hold substantial PMS volumes in their tanks. While he praised Dangote for making Nigerians happy with lower prices, he questioned how station owners with old stock would cope and called for better coordination to avoid destabilising the supply chain.
Gillis-Harry said sudden price shifts without clear communication create serious planning problems across refining, transport and retail segments. He stressed that all parts of the chain are interconnected and need more predictable guidance to adjust investments and operations.
Chief Executive Officer of Petroleumprice.ng, Jeremiah Olatide, warned that rising tension between regulators and operators could threaten energy security and the stability of the downstream market. He described Dangote Refinery as a major asset to the economy whose operations have helped bring pump prices down to about N739 per litre during the festive period.
Olatide argued that this is not the time for blame games between the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the refinery. He said regulators and regulated operators must maintain a working relationship to guarantee reliable fuel supply, while also ensuring Nigeria does not depend on a single refinery for energy security.
The dispute escalated politically when Dangote accused NMDPRA Chief Executive Farouk Ahmed of sabotaging the economy by issuing fuel import licences despite what he described as sufficient local production. He also made personal allegations about the regulator’s private spending, which have stirred further controversy.
In response to the growing tension, the House of Representatives Committee on Petroleum Resources (Downstream) has summoned Dangote and the NMDPRA leadership. Committee chairman Ikenga Ugochinyere said lawmakers want to identify the root issues and find sustainable solutions to protect the gains made in the downstream sector.
Dangote has continued to question why petrol should sell for as high as N900 per litre when transportation from the refinery, according to him, should not cost more than N15 per litre. He accused the regulator of issuing 47 import licences for over seven billion litres of petrol for the first quarter of 2026, despite local capacity, and framed his pricing strategy as part of a broader fight against what he views as unfair import competition.
For now, as MRS stations begin selling petrol at N739 per litre and private depots keep cutting prices, many Nigerians are enjoying visible relief at the pumps. But beneath the short-term benefit, the sector is locked in a brutal price contest that has left importers, depot owners and marketers bleeding, with uncertainty over how long any of the players can sustain their current positions.
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