Petrol Price War: Oil Marketers Slash Costs, Reduce Purchases Amid Huge Losses
Oil marketers have reduced the volume of their purchases following the continued crash in petrol prices
The marketers reported that they fear losing billions due to the ongoing price war between the NNPC and Dangote Refinery
The marketers also projected that petrol prices could crash to as low as N500 per litre depending on crude oil prices and the exchange rate
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Amid the raging price war in the downstream oil sector between Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPC), oil marketers have started slashing the petrol volume purchases amid massive losses.
The price war started in November 2024 when the giant Dangote Refinery reduced its PMS prices from N990 to N970 per litre.
Dangote Refinery’s price war with NNPC
The refinery further crashed its PMS price to N899, saying it wants to relieve Nigerians during the Christmas and New Year holidays.
NNPC followed with a similar price adjustment, Petroleum Products Retail Outlet Owners of Nigeria (PETROAN) confirmed.
On February 1, 2025, the 650,000 bpd-capacity refinery crashed its price to N890 per litre before another crash at N825 per litre.
The new Dangote petrol pricing structure set the stage for further price slash.
Petrol Price War: Oil Marketers Slash Costs, Reduce Purchases Amid Huge Losses| image 30
On March 3, 2025, selected NNPC retail outlets reported that the state oil company had lowered its petrol prices to N860, matching Dangote’s new price.
However, they argue that the constant price adjustment have caused significant losses for marketers and importers who lose about N2.5 billion daily and N75 billion per month.
Marketers lament losses due to price crash
According to reports, PETROAN has asked regulators to mandate that fuel prices be adjusted every six months.
Punch reports that the national vice president of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, said that while the price war has been beneficial to Nigerians, the unpredictable fuel price reductions have forced marketers to cut purchases, leading to daily losses.
According to Fashola, the price slash is affecting marketers negatively as they are losing billions daily.
He said not buying large volumes is the only way to be safe as bulk purchases may lead to losses if the prices drop again.
Following the drop in the landing cost of petrol to N774.82 per litre, the Dangote Refinery lowered its price again from N825 to N815 per litre, sparking another price war in the industry.
Reports say the Major Energy Marketers Association of Nigeria (MEMAN) disclosed that the estimated import parity into tanks has crashed by N152.65 or 16.5% from the N927,48 per litre recorded in February 21, 2025.
The development comes following a drop in Brent crude prices, which declined to $70 per barrel, while the US Western Intermediate (WTI) dropped to $66.70.
Marketers project new petrol prices
Legit.ng earlier reported that the continued crash in petrol prices could lead to the commodity selling at N800 per litre, saying the crash in landing costs will intensify the price war between the two biggest oil firms in Nigeria.
Fashola predicted a further drop in petrol prices to N500 per litre if oil prices drop to $40 per barrel and the naira rises below N1,000 to a dollar.
The National Bureau of Statiscs (NBS) said Nigeria’s petrol imports in 2024 hit N15.42 trillion, representing 105%.
Experts raised concerns over the imports amid Nigeria’s increased refining capacity.
The IPMAN vice president said the imports will break the monopoly and lower the cost of imported products in the downstream petroleum sector.
Dangote Refinery counts losses after petrol price crash
Legit.ng earlier reported that the Dangote Refinery is projected to have lost N32.5 billion due to the recent petrol price crash from the 500 million litres of PMS stock at the plant’s gantry.
Before announcing the price slash, the chairman of the Dangote Group, Aliko Dangote, disclosed that the mega facility had over 500 million litres of petrol in stock.
The explanation came when the facility sold petrol at N890 per litre.
