Petrol prices in Nigeria’s downstream market are facing renewed competitive pressure as marketers operating under Dangote Petroleum Refinery’s consortium arrangement offer petrol at ₦1,264 per litre, while changes to the refinery’s trading structure are giving participants greater flexibility to adjust their selling prices.
Petroleumprice.ng gathered that competition among the consortium members has intensified as marketers adjust their prices to attract buyers. The development is also putting pressure on independent depot operators to review their own prices to remain competitive.
An industry source familiar with the arrangement told Petroleumprice.ng that the new trading structure, which uses the European gasoline benchmark known as EBOB alongside a premium, has changed how participating marketers approach pricing.
EBOB, short for Eurobob, is a benchmark for European gasoline blendstock traded in the physical and derivatives markets. Under a benchmark-plus-premium arrangement, the price is linked to the relevant benchmark, with an additional premium applied according to the agreed commercial terms. Other applicable costs and currency considerations may also affect the final price.
The source said the arrangement had given the 37 consortium members room to adjust their selling prices in response to market conditions and competition.
According to the source, the difference between some marketers’ purchase and resale prices is currently around ₦50 per litre. This has given consortium members more room to compete and reduce their selling prices. As at Today, NIPCO offered petrol at ₦1,265 per litre, while Ardova sold at ₦1,264 per litre and Aiteo at ₦1,264 per litre.
The pricing flexibility comes as Dangote Refinery continues to review prices amid changing market conditions. The source said the refinery had recently reduced its petrol price, triggering price reductions of as much as ₦10 per litre across depots within a single day, reflecting changes in the market.
The resulting competition is extending beyond the consortium. According to the source, independent depot operators have also been under pressure to adjust their prices as buyers compare available offers across the downstream market.
For marketers, the ability to offer competitive prices can influence the volume of petrol they sell and the customers they attract. However, the extent to which individual operators can reduce their prices depends on their purchase costs, commercial terms and operating expenses.
The latest reduction to ₦1,264 per litre highlights the increasingly competitive pricing environment surrounding Dangote Refinery’s petrol supply network. Whether the price level will be sustained will depend on subsequent pricing decisions and changes in market conditions.