Price War Intensifies as Petrol Stations Undercut Dangote Refinery’s Recommended Price
The petroleum sector is currently experiencing a deepening price war, with several retail outlets now selling Premium Motor Spirit (PMS), commonly known as petrol, at prices below the N739 per litre benchmark set by the Dangote Petroleum Refinery. This aggressive price competition has forced many importers and depot owners to absorb significant losses in an effort to remain competitive in a rapidly evolving market.
Initially, the Dangote refinery had announced a substantial reduction in petrol pump prices in December, bringing them down from approximately N900 to N739 per litre. This move was intended to make fuel more accessible and stimulate local consumption. However, the subsequent market response has seen a ripple effect, pushing prices even lower as various players scramble to capture market share.
During recent market surveys, it was observed that some filling stations are now offering petrol at rates lower than those of MRS Oil, the primary partner designated by the Dangote refinery to spearhead the N739 per litre price point. As of Sunday, specific prices recorded included:
- NIPCO: N738 per litre
- SAO filling stations: N735 per litre
- Akiavic: N737 per litre
- AP filling station (located near an MRS outlet in Mowe, Ogun State): N736 per litre
The intense competition has led to a dynamic pricing strategy among filling stations, particularly in areas where multiple outlets are situated. These operators are now closely monitoring their rivals’ pump prices to avoid being undercut. This strategy is directly impacting consumer behaviour, with motorists actively seeking out stations offering the lowest prices, leaving outlets with higher rates struggling to attract customers.
Industry data indicates that the average landing cost of petrol for many importers stands at approximately N762.38 per litre. In contrast, the Dangote refinery’s ex-gantry price is reported to be N699 per litre. Despite this considerable difference, importers have found it necessary to adjust their prices downwards to compete with the pricing strategy initiated by the Dangote-backed MRS outlets. This situation has led to significant financial strain, with reports suggesting that both Dangote and other importers are facing billions of naira in losses.
Operators in the downstream sector have clarified that the decision to lower pump prices is not necessarily a reflection of the cost of imported petrol being cheaper. Instead, it is primarily driven by a strategic imperative to secure a substantial portion of the market. As one operator, who wished to remain anonymous due to the prevailing competitive pressures, explained, “This is not a function of whether imports are better or not, but simply a market strategy to get a good share of the market. However, it needs to be stressed that we are not at war with any marketer or depot operator nor any refinery.”
The initial price adjustment by the Dangote refinery occurred on December 12, when it surprised depot owners and marketers by slashing the ex-gantry price of petrol by N129, from N828 to N699 per litre. Following this, the President of the Dangote Group, Aliko Dangote, publicly stated his awareness of plans by some marketers to maintain high pump prices despite the reduction. He vowed to enforce the new pricing regime, with MRS outlets committed to selling petrol at N739 per litre. Dangote had declared, “We are going to use whatever resources we have to make sure that we crash the price down. For December and January, we don’t want people to sell petrol for more than N740 nationwide. Those who want to keep the price high to sabotage the government, we will fight as much as we can to make sure that these prices are down. If you have money to come and buy, you can pick up petrol at N699.”
Initially, the introduction of Dangote refinery petrol at N739 per litre at MRS filling stations in Lagos and Ogun states led to a surge in demand, with motorists boycotting outlets selling at higher prices. This resulted in noticeable queues at MRS stations. However, the market dynamics have shifted, with some independent stations now offering even lower prices.
Chinedu Ukadike, spokesperson for the Independent Petroleum Marketers Association of Nigeria, highlighted that marketers reluctant to reduce prices risk losing customers due to accumulating bank interest charges on their capital. He elaborated, “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 further explained that the reduction in Dangote’s ex-gantry price incentivised marketers to adopt competitive pricing strategies to retain customers, as otherwise, bank interest would erode their capital.
Currently, numerous filling stations are selling petrol below the N800 per litre mark as the price competition continues unabated.
In a recent statement, the Dangote refinery provided details on its supply arrangements. Supply under the marketers’ arrangement commenced in October 2025 with an initial offtake volume of 600 million litres of PMS. This volume was subsequently increased to 900 million litres in November and further expanded to 1.5 billion litres in December, reflecting market growth and absorption capacity. In line with the liberalisation of the downstream market, the refinery opened PMS supply to all qualified marketers, bulk consumers, and filling station operators.
The refinery disclosed that since December 16, 2025, it has consistently dispatched between 31 million and 48 million litres of PMS daily from its gantry, contingent on market demand. These figures, the refinery noted, are verifiable through depot and loading records maintained under regulatory oversight.
To foster broader participation and enhance distribution efficiency, the Dangote refinery introduced several key initiatives. These include reducing the minimum purchase volume from two million litres to 250,000 litres and offering a 10-day credit facility secured by bank guarantees. These measures are designed to improve liquidity, support small and medium-sized operators, and reduce the nation’s reliance on imported fuel. The refinery stated that this expanded access framework has led to increased utilisation of locally refined PMS and has been a significant contributor to more competitive retail pricing, with domestic products now priced considerably lower than imported alternatives.
Addressing the surge in petrol imports observed in November, the Dangote refinery attributed this to import licensing decisions approved by the former leadership of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, which sanctioned volumes exceeding prevailing domestic demand. The refinery emphasised that this development was not linked to its operational capacity or supply commitments.
The Dangote refinery reiterated its dedication to ensuring reliable supply, promoting transparency, and fostering the orderly development of a competitive downstream petroleum market. It pledged to continue collaborating with regulators and industry stakeholders to bolster domestic refining, conserve foreign exchange, moderate prices, and strengthen long-term energy security.
