PRICE WAR: Dangote Refinery Forces NNPCL to Slash Pump Prices by N60 Per Litre

By Emmanuel Kwada

The Nigerian National Petroleum Company Limited (NNPCL) has slashed the pump price of Premium Motor Spirit (PMS), commonly known as petrol, following a series of strategic price reductions by the Dangote Petroleum Refinery.

Combo photo of Mele Kyari and NNPCL logo.

This development, described by industry observers as a “price war,” has sparked widespread optimism among Nigerians, who are set to benefit from lower fuel costs and a potential boost to the economy.

The Dangote Refinery, Africa’s largest oil refining facility located in Lekki, Lagos, announced a significant reduction in its ex-depot price of PMS on February 27, 2025, dropping it by N65 from N890 to N825 per litre.

NNPCL announced on March 3, 2025, a retaliatory cut in its pump price, bringing it down from N1,020 to N899 per litre

This move, effective immediately, was followed by an unprecedented decision to refund marketers N16 billion for previous purchases, a gesture that has been hailed as a “Dangote subsidy” by some analysts.

The refinery’s actions intensified pressure on NNPCL, the state-owned oil company and traditionally the dominant player in Nigeria’s downstream petroleum sector.

In response, NNPCL announced on March 3, 2025, a retaliatory cut in its pump price, bringing it down from N1,020 to N899 per litre in Lagos, with regional variations such as N970 in parts of the South-South.

Credit: Dangote Group

This marked the second price reduction by NNPCL in recent months, following a similar adjustment in December 2024 when it lowered prices to N899 per litre after Dangote slashed its ex-depot rate to N899.50.

Posts on X suggest that this competitive back-and-forth has forced NNPCL to rethink its pricing strategy, with one user noting, “It took Dangote, a private business, to drag the almighty NNPC to reduce prices.”

The rivalry stems from the operational launch of the 650,000-barrel-per-day Dangote Refinery, which began supplying petrol to the domestic market in September 2024.

It took Dangote, a private business, to drag the almighty NNPC to reduce prices

Nigerians had long anticipated that local refining would ease the burden of high fuel costs, exacerbated by the removal of subsidies in May 2023 and the country’s historical reliance on imported fuel.

However, initial prices from both Dangote and NNPCL disappointed many, with pump prices hovering above N950 per litre despite domestic production. The recent price cuts signal a shift, driven by competition rather than government intervention.

Industry experts attribute NNPCL’s price slash to Dangote’s aggressive pricing and growing influence. “Dangote’s refinery has disrupted the status quo,” said Dr. Okey Okere, an energy sector economist.

Dangote’s refinery has disrupted the status quo

“By lowering ex-depot prices and refunding marketers, they’ve forced NNPCL to act to remain relevant in a deregulated market.” The refinery’s ability to supply 25–30 million litres of petrol daily has also reduced Nigeria’s dependence on imports, saving on logistics costs like shipping and insurance, which should, in theory, reflect in retail prices.

For Nigerians, the benefits are immediate and tangible. Lower pump prices are expected to reduce transportation costs, a critical factor in a country where fuel prices heavily influence the cost of goods and services.

“This is a game-changer,” said Ezekiel Emmanuel, a Abuja-based taxi driver. “If fuel stays at N899 or lower, I can save more and maybe even reduce fares for my passengers.”

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) echoed this sentiment, noting that reduced fuel costs could stimulate economic activity by lowering production expenses and increasing disposable income.

Beyond immediate relief, the price war underscores the potential of healthy competition in Nigeria’s downstream sector. With the Port Harcourt and Warri refineries also resuming operations in 2024, domestic production capacity is on the rise.

However, the Nigerian Midstream and Downstream Petroleum Regulatory Authority recently revealed that local refineries, including Dangote and NNPCL’s facilities, meet less than 50% of the country’s 50 million-litre daily petrol demand, highlighting the need for sustained efforts to bridge the gap.

Dangote’s actions worthy of emulation

While challenges remain—such as weak purchasing power and the slow translation of fuel price reductions into lower food and transport costs—the current trend offers a glimmer of hope.

Posts on X reflect growing public approval, with one user calling Dangote’s actions “worthy of emulation” and another praising the refinery for driving progress.

As the competition between Dangote and NNPCL intensifies, Nigerians are cautiously optimistic that this rivalry will continue to yield dividends at the pump, easing the economic strain felt by millions across the country.

Read Also: The Story and Glory of Dangote Refinery