Nigeria’s downstream petroleum sector has entered a price war following the Dangote Petroleum Refinery’s decision to slash the gantry price of petrol from N828 to N699 per litre.
The move has triggered heavy losses for fuel importers, depot owners, and retail marketers, even as the refinery itself admits it is bleeding financially. Findings show importers could lose up to N102.48bn monthly, while Dangote refinery may lose about N91bn in the same period due to the price cut.
While many Nigerians have welcomed the reduction as relief during the festive season, marketers say they are forced to sell existing stocks bought at higher prices below cost.
Dangote announced the N129 per litre reduction on Friday and introduced a 10-day credit facility for marketers, with the new price taking effect from December 12. Dangote Group President, Aliko Dangote, said filling stations must sell petrol at N739 per litre nationwide, starting Tuesday.
To remain competitive, private depot owners have slashed prices. Market data showed Lagos depots reduced PMS prices by about 14 per cent, with many now selling around N710 per litre, down from about N828 a week earlier.
According to the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Nigeria consumes about 50 million litres of petrol daily. Dangote supplies roughly 23.52 million litres per day, while importers supply 26.48 million litres.
The Independent Petroleum Marketers Association of Nigeria warned that importers and filling stations could face massive losses, with marketers potentially losing over N80bn as cheaper fuel floods the market.
Despite the losses, marketers described the price cut as a positive outcome of local refining and deregulation, even as they brace for financial strain.
