Fuel Price War Heats Up as Importers Undercut Dangote Refinery Prices

Nigeria’s downstream petroleum market is experiencing a fresh wave of price competition, as independent fuel importers have slashed petrol prices below those offered by the Dangote Petroleum Refinery. This development comes at a critical time, with Dangote Group President, Alhaji Aliko Dangote, calling on the Federal Government to halt fuel importation in a bid to protect local refining.

Recent investigations have revealed that some filling stations across Lagos and Ogun States are now selling petrol for less than ₦860 per litre — undercutting Dangote’s rates. Notably, partners of the refinery such as MRS and Heyden have maintained pump prices between ₦865 and ₦875 per litre, but others have gone lower. A filling station identified as SGR in Ogun State, for instance, was dispensing petrol at ₦847 per litre as of Tuesday.

Market sources confirmed that many importers are now offering lower ex-depot prices than the Dangote refinery, which currently sells at ₦820 per litre. In contrast, depots like Aiteo and Menj were seen selling at ₦815 per litre, according to data from PetroleumPrice.ng.

This pricing war appears to be a strategic move by fuel importers to retain market share and stay competitive, especially after previously suffering losses due to Dangote's aggressive pricing strategies earlier in the year. The ongoing price cuts have added a new dimension to the liberalized petroleum market in Nigeria.

Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), confirmed the ongoing price drops, stating:

“Depot owners are dropping their petrol prices. Some of them are selling at ₦815, some at ₦817, while Dangote is selling at ₦820. NNPC is still selling at ₦825.”

Ukadike applauded the development as a testament to the power of market liberalisation. He stressed that rather than impose restrictions, the Federal Government should encourage fair competition and local refining as the best way to stabilize fuel prices and ensure quality.

“This is the beauty of the liberalisation of the market. That is why we opined that the President should not ban anybody from importing petroleum products. Nobody should be stopped. Local refining will naturally regulate pricing.”

However, this liberalized environment hasn’t gone down well with Dangote. At a recent event organized by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) in Abuja, the billionaire businessman warned that Nigeria’s local refining sector is at risk due to what he described as unfair competition from imported fuel.

Dangote argued that importers were flooding the market with cheap and often substandard fuel products, some of which, he claimed, would not be permitted in Europe or North America. He also alleged that subsidised Russian crude and petroleum products were being dumped into African markets, including Nigeria, undercutting local refineries.

“We are now facing increased dumping of cheap, often toxic petroleum products… discounted Russian crude finds its way to Africa, severely undercutting our local production, which is based on full crude pricing,” Dangote said.

According to him, this has led to an “unlevel playing field,” with local refiners being forced to slash their prices, sometimes below the cost of production. He emphasized the need for protective policies, citing examples from the U.S., Canada, and the European Union.

Dangote further called on President Bola Tinubu to apply the Nigeria First policy to the petroleum sector, urging that fuel importation be restricted to encourage investment in local refining.

“The Nigeria First policy announced by His Excellency, President Bola Tinubu, should apply to the petroleum product sector and all other sectors,” Dangote stressed.

But this proposal has sparked controversy. Marketers and fuel importers warn that banning fuel imports could reverse the gains of market deregulation and stifle competition. Many believe that the open market model should continue, with regulators playing a firm role in ensuring quality and fairness rather than imposing restrictions.

As the price war deepens, Nigerian consumers may be the short-term beneficiaries, with lower pump prices and more options. However, the broader implications for the future of domestic refining and energy security remain hotly debated.

Conclusion:
The ongoing battle between fuel importers and the Dangote refinery reflects the growing pains of Nigeria’s liberalised fuel market. While competition is driving prices down and offering consumers relief, the concerns about market sustainability, substandard imports, and long-term industrial investment cannot be ignored. Whether the government will intervene or allow the market forces to play out remains to be seen.

Share to: