Fuel prices in Nigeria are witnessing a sharp decline as a heated price war erupts between Dangote Petroleum Refinery and independent marketers. Depot prices have dropped significantly across key locations, with industry players racing to undercut each other in a bid to dominate the market.
Depot Price Analysis: A Market in Flux
A comparison of depot prices between Friday, January 31, 2025, and Monday, February 5, 2025, reveals a substantial reduction:
Lagos
- Nipco: ₦952 → ₦915 (-₦37)
- Dangote: ₦940 → ₦903 (-₦37)
- Aiteo: ₦942 → ₦905 (-₦37)
- Wosbab: ₦945 → ₦912 (-₦33)
Warri
- Matrix Warri: ₦970 → ₦935 (-₦35)
- A.Y.M Shafa: ₦970 → ₦933 (-₦37)
Calabar
- Zone4: ₦958 → ₦939 (-₦19)
- Fynefield: ₦950 → ₦940 (-₦10)
- Northwest: ₦955 → ₦940 (-₦15)
The most significant reduction occurred in Lagos, where Dangote, Nipco, and Aiteo slashed prices by ₦37 per litre, reflecting a 3.94% drop. Matrix Warri in Warri followed closely, with a ₦35 decrease (3.61%), while Zone4 in Calabar recorded a milder reduction of ₦19 (1.98%).
Why Are Prices Dropping?
Industry experts cite several reasons for the ongoing price slump:
1. Falling Global Crude Prices
Brent crude, the benchmark for global oil prices, has been on a decline, forcing local marketers to adjust their pricing. As of February 5, 2025, Brent crude futures traded at $75.34 per barrel, down by 1.1% due to rising U.S. crude inventories and global market fluctuations.
2. A Fierce Depot Price War
A competitive struggle is unfolding among depot operators as they fight to secure market share. Prices have become a major battleground, with operators aggressively undercutting each other to attract bulk buyers.
An industry insider described the situation as a “rat race,” where each marketer is striving to stay ahead. “They are all trying to close the gap on each other, and it’s a good thing for consumers,” the expert noted.
3. Dangote vs. Importers – The Quality and Price Debate
While Aliko Dangote’s refinery has promised high-quality locally refined fuel, importers continue to sell at lower prices. Some traders are routing fuel through Malta for blending, reducing costs but also compromising fuel quality.
Kelvin Emmanuel, an energy analyst, confirmed these concerns:
“One of the reasons marketers are wary of importers is the issue of substandard products. Dangote insists his product is cleaner, but importers are selling cheaper. So right now, two key factors are driving the market quality and price.”
Impact on Retail Pump Prices
With depot prices falling, fuel stations have begun reducing pump prices accordingly. Some stations that previously sold at ₦1,029 – ₦1,039 per litre have now dropped their prices to the ₦950 range.
A survey of filling stations in Lagos and other major cities confirms that retailers are adjusting prices downward, responding to the competition among depots.
A Battle for Market Control
Despite the price drop, imports remain high, raising questions about why Nigeria has not phased them out despite having functional refineries. Many industry insiders argue that vested interests are keeping fuel importation profitable, preventing full dependence on local refining.
The tank farms in Apapa remain the country’s main import hubs, storing refined products at premium landing costs, making fuel importation a lucrative business. Dangote has accused Nigerian oil producers of refusing to sell crude directly to his refinery, a claim that has further fueled tensions between his refinery and the government.
Looking Ahead: What Next for Nigeria’s Fuel Market?
As the battle between Dangote and independent marketers intensifies, two things will continue to shape the Nigerian fuel market:
- Quality – As concerns over substandard imported fuel grow, Dangote’s push for cleaner fuel may gain traction.
- Price – The depot price war is benefiting consumers, but the long-term sustainability of these price cuts remains uncertain.
With more refiners expected to come onstream and the government’s Decade of Gas initiative pushing for alternatives like CNG, Nigeria’s energy landscape is set for more changes. However, as long as hidden interests control fuel imports, local refining may continue to struggle.
For more updates on Nigeria’s fuel market, stay tuned to Petroleumprice.ng