The Nigerian downstream oil sector is currently experiencing intense competition as the landing cost of Premium Motor Spirit (PMS) has dropped significantly to N774.82 per litre, making it cheaper than the ex-depot price of N825 per litre set by the Dangote Petroleum Refinery.
This latest development has prompted major oil marketers to offer fuel at lower prices, creating a fierce price battle that could lead to a reduction in pump prices to around N800 per litre in the coming weeks.
According to industry sources, the continued decline in landing costs for imported PMS is a result of fluctuating crude oil prices, import logistics, and exchange rate adjustments.
Oil marketers revealed that the N774.82 per litre landing cost, which factors in expenses such as shipping, import duties, and currency exchange rates, is N50.28 cheaper than the N825 per litre offered at Dangote Refinery’s loading gantry.
This price differential is driving marketers to shift away from locally refined products in favor of cheaper imported alternatives.
Industry experts believe that the downward trend in crude oil prices has been a major contributor to this shift.
Chief Ukadike Chinedu, the National Publicity Secretary of the Independent Marketers Association of Nigeria, emphasized that crude oil is a major determinant in fuel pricing. He noted that if crude prices continue to drop, petrol prices could further decline to N800 per litre.
The ongoing price war follows the Nigerian National Petroleum Company (NNPC) Limited’s decision last Monday to reduce its retail petrol prices. NNPC adjusted its rates to N860 and N880 per litre, down from the previous N945 and N965 per litre in Lagos and Abuja, respectively.
Similarly, Dangote Refinery recently cut its ex-depot petrol price from N890 to N825 per litre. This marks its third price reduction in two months, signaling an effort to remain competitive in the rapidly shifting market.
However, the NNPC’s price cuts triggered a competitive response from private marketers, many of whom are now leveraging imported fuel’s lower costs to attract customers.
The declining PMS prices have had a significant impact on petroleum importers. Industry reports suggest that importers are incurring daily losses of N2.5 billion and a monthly loss of N75 billion due to the price drops.
To counter this, many marketers have now secured new consignments at lower costs, further undercutting Dangote Refinery’s pricing.
According to the Major Energies Marketers Association of Nigeria (MEMAN), fresh data from its Competency Centre Daily Energy Report shows that the estimated on-spot import parity cost into Nigerian tanks has fallen to N774.82 per litre, a 16.5% drop from the N927.48 per litre recorded on February 21, 2025.
Further analysis revealed that the 30-day average cost of imported PMS now stands at N864.92 per litre, while the on-the-spot sale at the NPSC terminal was N927.53 per litre.
Additionally, the report showed a decline in Brent crude prices, which dropped from $76.48 per barrel on February 21 to $70.36 per barrel, alongside an exchange rate fluctuation pegged at N1,517.24 per dollar.
Private depots have responded to market fluctuations by lowering their prices to remain competitive. An industry survey revealed new depot loading prices as follows: AA RANO Depot: N830 per litre; MENJ Depot: N830 per litre; MRS TINCAN: N830 per litre; WOSBAB: N832 per litre; AITEO: N832 per litre; RAINOIL: N831 per litre.
In contrast, marketers who purchased two million litres from Dangote Refinery at N825 per litre are reselling at N835 per litre, making just N1 per litre in profit, while competing depots are selling at even lower rates.
On Monday, oil marketers under the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) raised concerns over the frequent fuel price reductions.
Despite full deregulation of the sector, PETROAN called for a regulation that would require prices to be adjusted only every six months to stabilize market conditions.
The association argued that continuous price slashes are causing heavy losses for marketers and could destabilize the supply chain in the long run.
Industry players remain divided on whether further price reductions will benefit consumers or hurt businesses in the petroleum sector.
With the market in a state of flux, all eyes remain on crude oil prices, exchange rate trends, and government policies, which will ultimately determine the trajectory of PMS pricing in Nigeria in the coming months.
