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The recent reduction in premium motor spirit (PMS) prices by the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Refinery has caused a significant disruption in Nigeria’s petrol market, leaving independent marketers grappling with low patronage.
On Monday, Dangote Refinery announced a reduction in its ex-depot petrol price from N970 to N899.50 per litre, marking the first price drop since the deregulation of the sector. Similarly, NNPCL reduced its ex-depot price from N1,020 to N899 per litre, implementing a region-based pricing system across its retail outlets. For instance, in Lagos, Ogun, and Abuja, petrol is now sold at N925, N950, and N960 per litre, respectively.
In partnership with MRS Oil and Gas, Dangote Refinery further agreed to offer petrol at N935 per litre at all MRS Oil outlets nationwide. These price cuts have spurred heavy patronage at NNPCL, MRS, and Bovas filling stations, leading to noticeable queues and leaving competitors struggling to keep up.
Motorists like Adekunle Oyewale, speaking at an NNPCL outlet in Ojodu, Lagos, noted the economic advantage of patronizing stations with reduced prices. “I save over N100 per litre here compared to stations selling at higher rates. It’s worth the slight queue to save money,” he remarked.
However, independent and major oil marketers who have yet to adjust their prices are experiencing low sales, with some still selling petrol between N1,000 and N1,070 per litre across Lagos. These marketers face growing pressure to align with the new pricing regime or risk losing customers entirely.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), attributed the resistance to price adjustments to marketers wanting to clear old stock purchased at higher rates. “The competition we’re witnessing is the essence of deregulation. Stations holding back will soon have no choice but to lower their prices when their sales drop, leaving them unable to cover costs or satisfy creditors,” Yusuf explained.
Despite the petrol price reduction, transportation costs have yet to decrease, with commuters blaming the festive season for sustained high fares. Tosin Ogunye, a commuter at Berger Bus Stop, urged the government to intervene to ensure transport operators adjust fares to reflect the price cut.
Stakeholders have lauded the development, describing it as a significant win for motorists and the economy. National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Harry, commended NNPCL for its efforts to make petrol more affordable during the festive season.
“The price reduction is a welcome relief for Nigerians, enabling savings and boosting disposable income. It also lowers production costs, fostering economic activity and driving demand for goods and services,” Harry stated.
Harry also praised Dangote Refinery for fostering competition in the downstream sector while urging the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to maintain strict quality control to prevent compromises due to competitive pricing.
This shift in pricing dynamics, coupled with enhanced competition, signals the potential benefits of a deregulated market. However, stakeholders caution that sustained vigilance is essential to ensure these benefits reach the average Nigerian without sacrificing product quality.
