Competition in Nigeria’s downstream petroleum sector has intensified once more following a drop in the landing cost of imported Premium Motor Spirit (PMS), commonly known as petrol, below the ex-depot price offered by the Dangote Petroleum Refinery.
The Widening Price Gap
According to the Major Energies Marketers Association of Nigeria (MEMAN) Competency Centre Energy Bulletin, the landing cost for imported petrol averaged N721.80 per litre as of Friday, February 6, 2026. This is a significant drop from an average of N732.51 in late January 2026. The latest drop in landing cost is significantly lower than the price of N799 per litre sold at Dangote Refinery’s gantry.
This showed a N77.2 per litre price gap between imported fuel and Dangote Refinery.
Analysts observed that this latest price war is a sharp reversal from late 2025, when Dangote’s local production was significantly cheaper than imports.
Strategic Price Adjustments and Market Reaction
It would be recalled that the 650,000 barrels per day refinery had, in December, slashed its gantry price to N699 per litre from N828, and made its distribution partner, MRS, bring down the pump price to N739 per litre, making its product cheaper than imported ones while assuring supply stability. The refinery stressed that the gesture was to prevent the high cost of petrol and also help Nigerians cushion the heavy spending that comes with the festive season. The move had rattled importers, who lamented that the sudden price cut could lead to losses, as they had sourced the supply at a higher cost.
However, the refinery recently announced an adjustment of its gantry price to N799 per litre and pump of N839 for MRS, saying it is a modest realignment to sustainable levels to support long-term market stability and affordability.
This move initially triggered immediate price adjustments at other independent retail stations nationwide. However, subsequently, importers adjusted prices to compete with the Dangote-backed MRS.
Market operators say the development is reshaping pricing dynamics, barely one year and a few months after the commencement of large-scale local refining, which raised expectations of reduced reliance on imports.
The drop in landing cost—driven largely by easing global crude prices and currency movements, among others—has given petroleum marketers renewed incentive to source fuel from international suppliers rather than depend solely on domestic production.
Global Oil Trends Influence Local Pumps
Crude oil prices in the international market had surged above $70 per barrel recently following heightened friction between the U.S. and Iran over the latter’s nuclear programme. It has raised concerns over potential disruptions in the Strait of Hormuz, a vital oil transit point, keeping traders on edge. However, oil prices fell below the $70 mark after the U.S. and Iran agreed to hold talks. Brent Crude settled at $68.11 per barrel, while the U.S. West Texas Intermediate (WTI) sold for $63.60 on Monday, February 9, according to a Reuters report. The pledge by Iran and the U.S. to continue talks after Friday’s discussions in Oman has eased concerns that a failure to reach a deal might trigger instability in the Middle East.
Industry analysts observe that the easing global crude prices have given importers a leeway to adjust their prices and compete with the Dangote Refinery.
They note that this shift has introduced fresh price pressure on the Dangote Refinery, which had initially enjoyed a competitive edge by offering locally refined petrol and cutting logistics costs associated with importation. With imported products now arriving at a lower overall cost, marketers are increasingly weighing options based on price competitiveness rather than origin.
Petrol prices at retail stations across the country reflect growing competition. After setting the price at N839 per litre last week, after Dangote Refinery announced an adjustment of gantry price and pump price at partner stations, some filling stations in parts of Lagos and Ogun States have cut prices to between N835 and N815.
Pinnacle Daily’s checks over the weekend revealed that some NNPC stations in parts of Lagos sold at N835, while other independent stations, like Al-Moruf, sold at N833, Ardova PLC, N834.
Some filling stations owned by independent marketers in parts of Ogun State reportedly sold between N815 and N834 per litre.
Expert Perspectives: A Maturing Free Market
The renewed contest underscores the volatility of the liberalised fuel market, where prices are increasingly influenced by global trends rather than fixed subsidies. While consumers could benefit from lower pump prices in the short term, stakeholders warn that frequent swings may complicate planning for refiners and distributors alike.
As competition deepens, experts argue that the evolving landscape is a clear signal that Nigeria’s downstream sector is entering a more mature phase—one where market forces, rather than policy protection, will determine winners and losers.
The Case for Competition
Development economist Prof. Ken Ife said the rising competition is a sign of positive development in the petroleum market in the country.
Speaking in a televised interview, Ife, who is the Chief Economist at the ECOWAS Commission, said healthy competition is always desired in a free-market system, as it prioritises stability.
“The development bodes well for the market; that’s what we all pray for. In any free market, you pray for healthy competition that prioritises stability. That’s what is playing out,” Ife stated.
He observed that the Dangote Refinery initiated the fuel distribution system that triggered the current competition and stability in the market, which cost the company over N10 billion.
Citing projections by the American Energy Institute that crude oil prices would hover between $52 and $58 in 2026, Ife expressed optimism that, coupled with Donald Trump’s activities in Venezuela, there will be oversupply, leading to lower prices this year.
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He maintained that Dangote Refinery’s long-term significance remains intact, particularly in terms of energy security, foreign exchange savings, and job creation.
Commenting on the volatility of the landing cost due to fluctuation of crude oil prices and the impact on pump prices, the economic expert stated that Dangote Refinery has built a formidable logistics and storage infrastructure with the ability to store millions of litres of refined products that can ensure a stable fuel supply for over the next month.
He insisted that without the presence of the private refinery, Nigerian consumers would be paying over a thousand naira for a litre of petrol today.
The Need for Regulation
Energy expert Dan Kunle acknowledged rising competition in the downstream market but warned that there is a need for robust domestic refining and local supply of crude feedstock to make it sustainable in terms of fuel prices.
While highlighting the impact of the importation of cheap and substandard products, Mr Kunle called on the regulatory authority – the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) – to remain vigilant.
The energy expert stressed the need for the regulatory authority to exercise quality control, ensuring that cheap, substandard imported products do not flood the market.
He also urged NMDPRA to properly evaluate domestic consumption to ensure imports only fill the gap in local production, preventing the “dumping” of foreign fuel at the expense of local industry.
Also commenting on the development, Dr Idris Oni, a lecturer in Islamic Studies at Crescent University, Abeokuta, said the competition is good, but the regulatory authorities must ensure that the quality of imported fuel meets standards.
“This is good for the market as long as the imported fuel is also of top quality,” Dr Oni stated on his X handle.
Public affairs analyst Tunde Ayinde noted that it is a healthy competition but emphasised the need for independent marketers to come together and build a refinery to produce petroleum products locally instead of spending dollars on the importation of refined products, which puts pressure on the naira.
“Healthy competition! But the government should tell independent marketers to come together and build a refinery and set a deadline for them to achieve it. We can’t continue to make the Naira struggle with the Dollar because of the importation of what can be sourced locally,” Ayinde stated via his X handle.
Data analyst and public commentator Suleiman Madaki accused authorities of allowing the importation of substandard fuel, alleging that it is a ploy to sabotage Dangote Refinery. “Anyone supporting this cabal in the oil sector is an enemy of Nigeria. They want to destroy #DangoteRefinery the way they destroyed #NNPC refineries,” Madaki stated.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in mass communication.
