The Nigerian fuel market has entered a new competitive phase following the recent reduction in the ex-depot price of Premium Motor Spirit (PMS) by the Dangote Petroleum Refinery. The price cut, which saw the cost drop from N865 to N835 per litre, is poised to alter market dynamics significantly, potentially pushing petroleum importers to the edge of financial viability.
According to data gathered from the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), marketers stand to lose approximately N466.62 million daily and a staggering N13.998 billion monthly, as the local production from Dangote Refinery increasingly undercuts the cost of imported fuel.
The revised pricing structure offers a significant price advantage for the Dangote Refinery over imported PMS, with the average landing cost of foreign petrol hovering around N868.33 per litre—N33.33 higher than Dangote’s ex-depot rate. This petrol price disparity is already impacting the profitability of fuel importers and shifting demand in favour of local supply.
The petrol price revision marks the third such adjustment within six weeks by the Dangote Refinery, a move welcomed by many Nigerians but one that spells uncertainty for independent and major fuel marketers. Industry players argue that while consumers benefit from lower prices, those with existing high-cost stock are left to absorb significant losses.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, confirmed that marketers with old inventories will have to sell at a loss. “It is a good development for Nigerians; however, marketers with old-price stock will lose billions of naira. The price drop needs to reflect across the value chain fairly,” Ukadike stated.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) revealed that PMS importation has drastically dropped, from 44.6 million litres per day in August 2024 to just 14.7 million litres as of April 13, 2025. The reduction is attributed to growing output from local refineries, including the phased restart of the Port Harcourt Refining Company and modular refineries coming online.
This shift is expected to consolidate Dangote Refinery’s position in the market, effectively reducing Nigeria’s dependence on imported fuel.
Despite the advantages of local refining, stakeholders have raised alarms over the emerging dominance of Dangote Refinery. The President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Dr. Billy Gillis-Harry, criticized what he termed “arbitrary pricing practices,” warning that the lack of transparency and regulatory oversight could destabilize the downstream sector.
“There is no known cost-based formula driving these price reductions. If one player dominates due to size and capacity, it could skew the market. The government and regulatory agencies must ensure that price-setting processes are transparent and fair to all,” he argued.
The Crude Oil Refinery Owners Association of Nigeria (CORAN) also echoed concerns about the long-term viability of fuel importers. CORAN’s Publicity Secretary, Eche Idoko, warned that unless importers realign with the new refining realities in Nigeria, they may soon be forced out of business.
“Refining in Nigeria has come to stay. Importers must re-strategise or risk obsolescence. The business model has changed, and those who fail to adapt will be left behind,” Idoko asserted.
In response to the price cuts by Dangote, the Nigerian National Petroleum Company Limited (NNPC) has also slashed its PMS price to N935 per litre, down from N950. This move is seen as an attempt to stay competitive amid the rapid market changes.
However, NNPC’s new rate still exceeds the prices offered by Dangote’s distribution partners such as MRS, AP (Ardova), and Tecno Oil, which now sell PMS for between N890 and N910 depending on region.
The Dangote Refinery’s aggressive pricing is redefining Nigeria’s downstream petroleum sector, prompting a re-evaluation of strategies among fuel importers and marketers. While Nigerians may enjoy temporary relief at the pump, the sustainability of the current pricing regime—and its broader implications for competition, regulation, and investment—remains a pressing concern.