The Nigerian National Petroleum Company Limited (NNPCL) has reduced the ex-depot price of Premium Motor Spirit (PMS), also known as petrol, from ₦890 per litre to ₦825 per litre, marking a significant shift in the country’s fuel pricing dynamics.
This adjustment follows a similar move by Dangote Refinery, which recently slashed its ex-depot price by ₦65 per litre, prompting partner retail outlets to revise pump prices. As of March 1, 2025, Dangote-affiliated stations now sell petrol at ₦860 per litre in Lagos, ₦870 in the South-West, ₦880 in the North, and ₦890 in the South-South and South-East.
Market forces driving the price reductions
Speaking to Vanguard, NNPCL’s spokesperson, Olufemi Soneye, clarified that the company does not issue public statements on routine price adjustments, as such changes are driven by market forces in a deregulated economy. He emphasized that NNPCL remains committed to energy security and a competitive downstream sector, allowing all players to operate under fair market conditions.
Similarly, Chief Chinedu Ukadike, the Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), attributed the fuel price reductions to the strengthening of the naira and declining crude oil prices in the international market. According to Ukadike, these factors have enhanced the deregulation process, allowing market-driven pricing to take effect.
However, he noted that independent marketers are facing financial strain due to the sudden price cuts, as many had stocked up on petrol at the previous higher rate. Some marketers reportedly had up to three million litres in stock, while others had fuel-laden trucks still in transit when the price drop was announced.
Dangote Refinery’s refund initiative
To mitigate losses for fuel retailers, Dangote Refinery has introduced a refund policy, reimbursing retail outlets ₦65 per litre for PMS purchased before the price adjustment. According to Dr. Billy Gillis-Harry, President of the Petroleum Retailers Outlet Owners Association of Nigeria (PETROAN), the initiative applies to over 200,000 metric tonnes of fuel, translating to a ₦16 billion loss absorbed by Dangote Refinery.
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Gillis-Harry described the move as a positive step toward fair pricing and consumer protection, commending both Dangote Refinery and NNPC Retail Ltd for ensuring more affordable petrol prices for Nigerians.
Resolution of bridging debt dispute
Meanwhile, the Federal Government has intervened in the ongoing ₦100 billion bridging debt dispute, leading to a temporary suspension of the threatened shutdown by independent marketers. Ukadike expressed optimism that discussions with the Minister of State for Petroleum (Oil) would lead to a resolution within two weeks.
What this means for Nigerians
With fuel prices now adjusting to economic conditions and increased market competition, experts believe that Nigerians could benefit from greater pricing stability in the downstream sector. However, the situation also underscores the financial vulnerability of smaller, independent fuel marketers who struggle to keep up with large-scale adjustments.
As competition continues to intensify, all eyes remain on the federal government’s regulatory approach and the long-term sustainability of Nigeria’s deregulated fuel market.