Some oil marketers in Nigeria are removing the Nigerian National Petroleum Company Limited (NNPCL) logo from their filling stations as they shift away from franchise deals with the national oil firm. The move is driven by increasing competition in fuel prices, especially after the $20 billion Dangote Petroleum Refinery reduced its rates.
Marketers Rebrand to Cut Costs
Many independent marketers in Lagos and surrounding areas, including stations along the Lagos-Ibadan Expressway, have already dropped the NNPCL name. More may follow as they seek cheaper fuel sources to maintain profitability in the deregulated downstream sector.
According to Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, the trend is expected.
“Some marketers are changing and rebranding. Previously, NNPCL was the only importer and distributor of petrol, so marketers partnered with them to ensure supply. Now that things have changed, they are switching to other brands like MRS, which offers cheaper fuel,” he said.
Franchise agreements in the oil sector allow marketers to use the brand name of larger firms like NNPCL in exchange for product access. However, the emergence of the Dangote refinery, which sells petrol at lower prices, has disrupted this system.
Dangote’s Competitive Edge
The price war intensified after Dangote Refinery reduced its ex-depot price from ₦950 to ₦890 per litre. Independent marketers are now opting for direct purchases from Dangote instead of relying on NNPCL imports, which have a higher landing cost.
Oil and gas expert Olatide Jeremiah confirmed the shift, stating that marketers had previously paid millions for NNPCL franchise licences to access cheaper fuel.
“When petrol prices were high, NNPCL controlled the market and sold at a fixed rate lower than the landing cost. Marketers took advantage of this by securing franchise licences. But now, Dangote offers a better deal, so marketers are abandoning the franchise model,” Jeremiah explained.
Growing Pressure on NNPCL
The exit of marketers from NNPCL’s franchise model could reduce the company’s market dominance. Industry analysts say more fuel stations may rebrand as they seek cost-effective supply options.
Akinola Ogunyolemi, Chairman of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) in Lagos, explained that franchise deals are business decisions.
“These stations are privately owned. If a contract with NNPCL ends or a better offer comes along, they can switch brands. It’s simply business,” he said.
A Changing Market
With deregulation driving competition, the fuel retail market is shifting. The cost of imported petrol has risen above the price of Dangote’s locally refined fuel. Latest data from the Major Energy Marketers Association shows the landing cost of imported petrol is now ₦910–₦939 per litre.
Industry insiders predict further price battles as NNPCL and private depot owners seek ways to remain competitive.
“Dangote’s price drop was partly due to pressure from bulk buyers who were making losses. More pricing wars are coming as the market adjusts,” a source disclosed.
As market forces continue to shape Nigeria’s fuel distribution, more marketers may abandon old partnerships in search of better deals.
