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By Adewale Sanyaolu
As intense competition between Dangote Refinery and NNPC Retail Ltd drives down petrol prices, importers are scrambling to stay afloat, seeking alternative markets to offset mounting losses.
Faced with shrinking margins and volatile global dynamics, many, Daily Sun learnt, are rethinking their strategies to sustain operations as the operating space gets more undulating.
Sources reveal that marketers, especially those with substantial stockpiles in their tank farms and incoming petrol shipments, have been caught off guard by the market upheaval and are grappling with unexpected and heavy losses.
Penultimate week, Dangote Refinery and NNPC Retail Limited slashed petrol pump prices from over N900 per litre to N860 per litre. The reduction has sent ripples through the market, leaving industry players scrambling to stay afloat as they navigate the financial strain of the price cut.
Commenting on the development, the President of the Petroleum Products Retail Outlets Association of Nigeria (PETROAN), Mr. Billy Gilly-Harry, said the price competition is a good one for the industry, especially for Nigerians and members of the public.
He noted that the development signals full deregulation of the industry, as competition among players is expected to become fiercer in the months ahead. He emphasized that the situation should be managed more efficiently in order to maximize its benefits and ensure that Nigerians get a better deal.
Gilly-Harry, while sympathising with investors who may have recorded losses in the ongoing price war between Dangote and NNPC, said many of them have already devised fresh strategies to remain in business, including seeking alternative markets for their expected cargoes.
He stated that the liberalization of the downstream market was never a death knell for petroleum product importation. While the industry encourages in-country refining, he explained, it also supports importation.
The PETROAN President stressed the industry’s preference for a multiplicity of supply sources, including Dangote, NNPC, modular refineries, and imports.
According to him, competition, particularly with imports, is what ensures that domestic prices do not exceed import parity, thereby guaranteeing affordability and sustainability.
“We won’t say that because we support in-country refining, we won’t patronize imported products if they are cheaper. No, we will. It is now up to importers to be more efficient by sourcing quality products at the best available price,” he said.
He argued that those in the petroleum importation business are well aware that it is a highly volatile venture, susceptible to price fluctuations that impact both losses and profits.
Also speaking, a top official of a major downstream marketer involved in the sale, importation, and distribution of petroleum products, who spoke on condition of anonymity, told Daily Sun that importers were already in talks with some of their bulk buyers to negotiate price cuts.
“For us, survival comes first at this moment. What we have in our tanks does not align with the current market price. So, we are engaging our customers to pick up products at a discounted rate to safeguard our investments.
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“At the moment, our focus is not on profit but on cost recovery. The risk of inaction is high because we cannot predict what will happen next. If these two players decide to further reduce prices this week, we will incur even greater losses.
“We are currently losing on two fronts: first, due to price differentials, and second, because of turnaround time. We have lost patronage,” he added.
He further stated that the situation would force importers to seek more efficient strategies, including sourcing cheaper products from other countries.
In a public notice announcing the price cut, Dangote listed three partner filling stations in Lagos:MRS: N860 per litre, AP: N865 per litre and Heyden: N865 per litre.
In a statement, the refinery confirmed that the new pricing structure would take effect from Thursday, February 27.
“This strategic price adjustment is designed to provide essential relief to Nigerians in celebration of the Ramadan season, while also supporting President Bola Ahmed Tinubu’s economic recovery policy by alleviating the financial burden on the Nigerian populace.
“It is important to note that Dangote Petroleum Refinery has consistently lowered the prices of petrol and other refined petroleum products for the benefit of Nigerians. This marks the second reduction in PMS prices in February 2025, following a previous decrease of N60 earlier in the month.”
The refinery also announced that it would absorb N16 billion in losses by refunding N65 per litre to marketers, ensuring Nigerians benefit from cheaper fuel.
It confirmed that marketers who purchased Premium Motor Spirit (PMS) at rates higher than the advertised prices from any of its key partners—AP (Ardova Plc), Heyden, or MRS—would receive a refund.
The company explained that this initiative is part of its commitment to ensuring that Nigerians are the primary beneficiaries of the price reduction, in alignment with President Bola Tinubu’s Renewed Hope Agenda aimed at stimulating the economy.
The refinery confirmed that it would refund N65 per litre on over 200,000 metric tonnes of PMS purchased by marketers at the old gantry price of N890 per litre, prior to the new rate of N825 per litre.
“This measure, effective February 27, 2025, ensures that none of our valued business partners will suffer losses due to the price adjustment. More importantly, it guarantees that the new, lower rate takes immediate effect nationwide for the benefit of the Nigerian people,” the statement read.
Dangote also urged other marketers sourcing products from its refinery to pass on the benefits of the new pricing to consumers at the retail level, encouraging a collective commitment to affordable, high-quality products.
Additionally, the company condemned any exploitation of the new pricing structure.
“It is both unpatriotic and detrimental to the welfare of Nigerians for any party to purchase at N825 per litre and then sell to consumers at N945 or more per litre. This constitutes excessive profiteering, further burdening Nigerians for personal gain,” the statement added.
