The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has thrown its weight behind the growing competition in the downstream petroleum sector following a significant price reduction by the Dangote Refinery. The refinery lowered the ex-depot price of Automotive Gas Oil (AGO), commonly known as diesel, by N200, bringing it from N1,800 to N1,600 per litre.
Price Cut Amid New Import Licences
This reduction comes shortly after the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) reportedly granted fresh import licences to five petroleum marketers. The move has intensified competition in the domestic fuel market. According to PETROAN, several vessels carrying imported petroleum products arrived in Nigeria over the weekend, boosting supply volumes and putting pressure on local pricing.
Market Dynamics and Legal Challenges
The Dangote Refinery had recently challenged the issuance of these import licences in court, arguing against the continued importation of products that can be refined locally. However, industry stakeholders believe the latest diesel price cut illustrates the benefits of a competitive downstream sector. Dr Joseph Obele, National Public Relations Officer of PETROAN, described the development as a positive signal for consumers and the broader economy.
In a statement, Obele said, “This development is widely seen as a positive impact of increased competition in the downstream petroleum sector.” He noted that the new pricing may create challenges for marketers who recently imported products at higher landing costs, as Dangote Refinery’s revised price is now below the estimated import landing cost.
Warning Against Monopoly
Obele also cautioned against monopoly in the petroleum industry, insisting that sustained competition is the best route to lower fuel prices and improved energy affordability for Nigerians. “All hail competition and say no to monopoly in the petroleum industry. The more the competition, the better prices consumers will enjoy,” he stated.
The latest adjustment is expected to trigger further reactions across the downstream value chain, as marketers and depot operators strive to remain competitive amid fluctuating global oil prices and foreign exchange pressures. Analysts suggest this move could signal the beginning of a broader pricing battle among operators seeking market dominance in Nigeria’s fully deregulated petroleum sector.
