Petrol prices have taken a dramatic turn in Nigeria’s downstream sector as private depot owners slash their ex-depot price of Premium Motor Spirit (PMS) to ₦840 per litre, matching the latest rate from the Dangote Petroleum Refinery. This price cut has ignited a fresh wave of competition in the liberalised market reshaping supply dynamics and stirring fears of a price war.
Dangote’s Move Sets the Pace
On June 30, the Dangote Refinery, Africa’s largest single-train facility, dropped its wholesale price from ₦880 to ₦840 per litre. The refinery attributed the cut to lower international crude prices and improved domestic logistics. But market observers see this as a strategic move to expand market control and pressure legacy depot operators still reeling from high import costs.
Industry insiders confirm that within hours of the Dangote price update, at least five major private depots across Lagos, Warri, and Calabar matched the new ₦840/litre rate to avoid losing their bulk buyers.
“Dangote has forced our hand. If we don’t match him, our tanks will remain full while trucks go elsewhere,” a depot owner in Apapa admitted anonymously.
Current PMS Prices Across Depots
The race to the bottom is intensifying. As of July 1, several key private depots have aligned or undercut Dangote’s price in an aggressive move to retain bulk buyers and station operators:
- Menj (Lagos): ₦840/L
- First Royal (Lagos): ₦840/L
- Mao (Lagos): ₦840/L
- Emadeb (Lagos): ₦840/L
These figures highlight the urgency among depot owners to remain price-competitive, especially in coastal cities where distribution and truckload volumes are high.
Dangote May Be Forced to Cut Prices Again
Industry analysts believe this wave of depot-led reductions may trigger another price review by Dangote in the coming days. With private players now undercutting his refinery’s ₦840/litre mark in some locations, the pressure is mounting.
“Dangote is watching the market closely. If Matrix and others sustain ₦860 levels or lower in Warri and Calabar, expect Dangote to slash again possibly to ₦820,” said an executive at a downstream trading firm.
Such a move would further tighten margins and reshape the competitive landscape, possibly leading to a shakeout of smaller depots that cannot compete.
A Full-Blown Price Battle Emerges
This isn’t just a price adjustment this is a battle for survival. The ex-depot price drop signals an all-out pricing war between Dangote’s locally refined PMS and traditional depot players who still rely heavily on imported fuel or bulk allocations from NNPCL at higher cost.
While Dangote Refinery refines over 10 million litres of PMS daily, supported by a naira-for-crude supply model, most depot owners must still navigate volatile global oil markets and high exchange rates. Their landing cost often exceeds ₦870–₦910 per litre, putting them at a disadvantage in a now consumer-driven market.
Retailers Adjust, Consumers Rejoice For Now
Fuel stations across Lagos, Ibadan, and Onitsha are already adjusting pump prices in response. Dangote-aligned outlets such as MRS and Ardova are now retailing PMS between ₦925 and ₦955 per litre, while other independent marketers scramble to avoid product glut and customer loss.
In Lagos, motorists were seen queuing at lower-priced stations, bypassing outlets still selling at ₦920 or more.
“Fuel is finally coming down, but I just hope it stays that way,” said Bolaji Ajayi, a Bolt driver in Surulere. “Every ₦10 saved on a litre makes a difference when you buy 40 litres daily.”
Depots Struggle With Unfavourable Economics
The pricing gap is already putting immense financial strain on private depot operators.
“We bought at ₦870 last week and now we’re being asked to sell at ₦840? That’s a direct loss,” said Olumide Abass, a petroleum trader at Ijegun-Egba.
Many depots are either selling at break-even or at a loss, or halting sales temporarily—waiting for cost adjustments or government intervention.
A Skewed Playing Field in a Deregulated Market
Following the fuel subsidy removal in May 2023, PMS pricing has been determined by market forces. But the playing field is far from equal.
Dangote’s access to domestic crude in naira, combined with scale and logistics efficiency, gives it pricing power unmatched by others.
“This is no longer a liberalised market; it’s an uneven fight,” said a senior executive at a tank farm in Ibafo. “We pay in dollars. He pays in naira. We import fuel. He refines locally. Who wins in the long run?”
Analysts Warn of Emerging Monopoly Risks
Although consumers are enjoying short-term relief, analysts are raising alarms over long-term implications.
“Today it’s ₦840 to capture market share. But once competition is crushed, the prices could rebound—unregulated,” warned Amaka Eze, an oil and gas policy analyst.
Market consolidation around Dangote, if unchecked, could tilt the sector into private monopoly territory, especially as many depot owners face reduced volumes and squeezed margins.
Dangote Eyes Total Market Capture
Meanwhile, Dangote isn’t slowing down. The company is set to roll out 4,000 Compressed Natural Gas (CNG)-powered tankers by mid-August, aiming to slash transport costs by as much as ₦1.7 trillion annually. This would give it even more leverage to dictate market prices at both depot and retail levels.
Relief or Risk?
The crash in depot petrol prices to ₦840/litre is a reflection of fierce market competition. While motorists and retailers breathe a sigh of relief, the bigger picture reveals an industry being reshaped by power concentration.
If regulatory agencies don’t ensure fair market practices and access to crude, the sector risks replacing a subsidy-driven monopoly with a private refining monopoly.
For now, the Nigerian consumer is winning. But the true cost of this relief may unfold in the months ahead.
