The Independent Petroleum Marketers Association of Nigeria (IPMAN) has called on Dangote Petroleum Refinery to slash its petrol price below the current ex-depot rate of N825 per litre, arguing that the refinery’s favorable operating conditions should enable significantly cheaper fuel for Nigerians.
This demand comes amid a fierce price war in Nigeria’s downstream oil sector, with marketers projecting pump prices could drop to around N800 per litre due to falling global crude oil prices and a stronger naira.
IPMAN’s Publicity Secretary, Chinedu Ukadike, in an exclusive interview, emphasized that Dangote Refinery benefits from unique advantages, including the federal government’s naira-for-crude policy, which eliminates foreign exchange costs.
“We’re a crude oil-producing nation, and with crude supplied in naira, petrol should be far cheaper,” Ukadike said.
He estimated that, based on production and depot landing costs, petrol prices could realistically fall to between N750 and N780 per litre if the naira strengthens to N1,100 against the dollar.
The call follows comments by Aliko Dangote, President of the Dangote Group, who recently told ECOWAS officials and President Bola Tinubu that his refinery has helped lower fuel prices, with Nigerians paying about 55% of what other West African nations pay for petrol.
Dangote noted that many West African countries, unlike Nigeria, neither produce crude nor refine it in local currency, justifying Nigeria’s relatively lower prices.
However, Ukadike countered, “While Dangote has tackled fuel scarcity, the price isn’t low enough given the enabling environment provided to the refinery.”
The price war intensified earlier this year when the landing cost of imported Premium Motor Spirit (PMS) dropped to N774.72 per litre, N50.28 less than Dangote’s then-gantry price of N825 per litre.
This prompted many marketers to favor imported fuel, forcing Dangote Refinery to reduce its ex-depot price multiple times, from N890 to N825 per litre by February 2025, and recently to N815 per litre.
The Nigerian National Petroleum Company Limited (NNPC) also cut its pump prices to N860 per litre in Lagos, sparking competitive pricing among private marketers.
Industry expert Olatide Jeremiah, CEO of petroleumprice.ng, predicted that Dangote may be compelled to further lower prices to retain market share, as marketers increasingly source from private depots offering more stable pricing.
“Last week, imported petrol prices fell below Dangote’s ex-depot rate, and private depots are now seeing more patronage,” Jeremiah said.
However, some analysts warn that sustained low prices could be unsustainable. Dr. Paul Alaje, Chief Economist at SBM Professionals, cautioned that aggressive pricing by Dangote could risk creating a monopoly, potentially driving competitors out and leading to higher prices in the long term.
“Consumers benefit now, but prices could exceed N1,000 per litre if competition wanes,” Alaje noted.
Consumers have welcomed the prospect of cheaper fuel, with commercial drivers in Lagos expressing hope for further reductions to ease economic pressures.
Meanwhile, IPMAN urged the government to strengthen the naira to support lower fuel prices, arguing that exchange rate fluctuations remain a key driver of costs.
Dangote Refinery, which has a stockpile of 500 million litres of petrol, has been a game-changer in reducing Nigeria’s reliance on imports since starting production in September 2024.
However, marketers’ push for prices below N800 per litre signals ongoing tension in the sector, as stakeholders balance profitability with consumer affordability.
As the price war continues, Nigerians await whether Dangote Refinery will heed IPMAN’s call and further reduce prices, potentially reshaping the country’s fuel market dynamics.
Source: Punch
