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April 21, 2025 - Fuel importers in Nigeria may face significant financial losses estimated at over N13.998 billion monthly following a major reduction in the ex-depot price of petrol by the Dangote Petroleum Refinery.
The refinery, in a move that has upended Nigeria’s fuel pricing dynamics, announced last Wednesday a third reduction in the price of Premium Motor Spirit (PMS) within six weeks. The latest cut brought the ex-depot price down by N30, from N865 to N835 per litre, representing a 3.5% decrease.
Fresh industry data now shows that the average landing cost for imported petrol stands at N868.33 per litre, which is N33.33 higher than the new Dangote refinery price. This sharp disparity has placed fuel importers—particularly those under the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN)—at a disadvantage, as they are likely to incur losses of approximately N466.62 million daily if forced to match the local price.
Price War Disrupts Market Balance
The latest Dangote price drop has created a supply imbalance that favors domestically refined petrol, effectively sidelining foreign importers. Fuel marketers have warned that the move could lead to a major reshaping of the country’s petroleum supply chain.
“This signals a pivotal shift,” said one industry analyst. “We are likely witnessing the consolidation of market dominance by the Dangote Refinery, which is now flexing its pricing power in a deregulated environment.”
The new price structure will see Dangote’s major distribution partners—MRS, AP (Ardova), Heyden, Optima Energy, Hyde, and Tecno Oil—selling petrol at N890 per litre in Lagos (down from N920), N900 in the South-West (from N930), N910 in the North-West and North-Central (from N940), and N920 in the South-East, South-South, and North-East (down from N950).
Old Stock, New Losses
While consumers are expected to benefit from the price cut, independent marketers are sounding the alarm over significant inventory losses. According to Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), marketers who bought petrol at previous high prices must now sell below cost.
“It’s a positive development for consumers,” Ukadike said. “But marketers with older stock purchased at higher prices are now incurring heavy losses. Some could lose billions. This outcome must reflect the naira-for-crude policy.”
Import Decline Driven by Local Output
The price disparity coincides with a sharp drop in Nigeria’s fuel imports. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) recently revealed that daily petrol import volumes fell from 44.6 million litres in August 2024 to 14.7 million litres as of April 13, 2025. This decrease has been attributed to improved local refining, including the partial restart of the Port Harcourt Refinery in November 2024 and increased production from modular refineries.
Assuming a continued import level of 14 million litres daily at N868.33 per litre, the total import cost would be approximately N12.17 billion per day. By contrast, sourcing the same volume from the Dangote Refinery at N835 per litre would cost N11.69 billion, a difference of N466.62 million per day.
Calls for Regulation Amid Price Volatility
Fuel importers and retailers are increasingly expressing concern over what they describe as “arbitrary pricing” in the sector. Dr. Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), warned of systemic risks posed by unchecked price fluctuations.
“There’s no consistent formula guiding these prices,” Gillis-Harry said. “Refineries seem to adjust prices arbitrarily, and this is dangerous in an open market. The volatility creates uncertainty for retailers and disrupts the entire value chain.”
He called on regulatory bodies such as the Federal Competition and Consumers Protection Commission (FCCPC) and the NMDPRA to monitor pricing practices and ensure fairness across the industry.
Future of Fuel Importation in Question
The Crude Oil Refinery Owners Association of Nigeria (CORAN) has warned that fuel importers could soon be pushed out of business if they fail to adapt to the growing dominance of local refining.
“We’ve invited them to strategize with us for the future,” said Eche Idoko, CORAN’s Publicity Secretary. “But many have been reluctant. If this continues, they may not survive much longer. Local refining is here to stay.”
NNPC Adjusts Price
Meanwhile, the Nigerian National Petroleum Company Limited (NNPC) has also revised its retail prices downward. Petrol is now sold at N935 per litre at NNPC stations in parts of Abuja, including the Central Area, Wuse Zone 4, and Kubwa—N20 higher than the N910 per litre available at partner stations of the Dangote Refinery.
As the market reacts to Dangote’s price strategy, analysts say Nigeria’s downstream sector could experience a realignment, with domestically refined fuel gradually becoming the dominant source for national supply. For importers, the pressure is mounting—and the clock is ticking.
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