The Nigerian National Petroleum Company Limited (NNPC) has announced a reduction in the ex-depot price of Premium Motor Spirit (PMS), also known as petrol, from N890 per litre to N825 per litre, reflecting growing competition in Nigeria’s downstream sector.
NNPCL’s spokesperson, Olufemi Soneye, confirmed the change in an interview yesterday, noting that since deregulation, the company has consistently adjusted its prices in response to market dynamics.
Soneye emphasized that, as an energy company, NNPC does not typically issue press releases or public announcements for routine price changes, as such adjustments are an integral part of a market-driven system. He added that these price fluctuations are regular, driven by market forces, and are crucial in ensuring energy security and fostering a competitive environment where all Nigerians can participate in the sector under established regulations.
This price reduction follows a similar move by Dangote Refinery, which reduced its ex-depot price by N65 per litre, effective March 1, 2025. As a result, Dangote’s retail outlets have adjusted their prices, now set at N860 per litre in Lagos, N870 per litre in the South-West, N880 per litre in the North, and N890 per litre in the South-South and South-East.
Dangote Refinery stated that the price adjustment was designed to offer relief to Nigerians, especially as the Ramadan season approaches. The move aligns with President Bola Ahmed Tinubu’s economic recovery agenda by reducing the financial strain on the populace.
This is the second price reduction by the refinery in February 2025, following a N60 decrease earlier in the month. Additionally, during the December 2024 holiday season, Dangote reduced PMS prices by N70.50, from N970 to N899.50 per litre, as part of its commitment to alleviating living costs.
Dangote also clarified that the adjusted prices would vary across its partner retail outlets. MRS Holdings stations will sell petrol for N860 per litre in Lagos, N870 per litre in the South-West, N880 per litre in the North, and N890 per litre in the South-South and South-East. In contrast, AP (Ardova Petroleum) and Heyden stations will sell the product at N865 per litre in Lagos, N875 per litre in the South-West, N885 per litre in the North, and N895 per litre in the South-South and South-East.
Market forces and price reductions
The price cuts have been attributed to several market forces. Chief Chinedu Ukadike, the Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), explained that the strengthening of the naira and a drop in global crude oil prices contributed to the price reduction. He highlighted that the falling dollar exchange rate and declining crude oil prices have strengthened the deregulation process, with market forces now driving petrol prices.
However, Ukadike noted that the sharp N65 per litre price cut has placed a financial strain on independent marketers, many of whom had already purchased large volumes of fuel at the previous higher price. Some marketers still had fuel in transit when the price change was announced. While large marketers with strong financial backing can adjust their prices quickly, independent marketers, who have weaker financial positions, struggle to absorb such losses.
Ukadike also mentioned that the Federal Government’s intervention has delayed the threatened shutdown of operations by independent marketers, with the issue expected to be resolved within two weeks after discussions with the Minister of State for Petroleum (Oil).
PETROAN’s support for price reduction
The Petroleum Retailers Outlet Owners Association of Nigeria (PETROAN) expressed its support for the price reductions, stating that they would ease transportation costs and reduce the financial burden on Nigerians. PETROAN President, Dr. Billy Gillis-Harry, praised NNPC Retail Ltd for its proactive measures to assist Nigerians, calling the price reduction a significant relief for many citizens facing financial difficulties.
Dr. Gillis-Harry also commended Dangote Refinery for its initiative to compensate retail outlet owners affected by the price reduction. Dangote has launched a refund policy, offering a N65 per litre refund to retail outlets that purchased PMS at the previous higher price.
This refund, covering over 200,000 metric tonnes of PMS, amounts to a N16 billion loss absorbed by Dangote Refinery. PETROAN’s president noted that this move demonstrates the refinery’s commitment to fair pricing and consumer welfare, as well as its support for retail outlets impacted by the price change.
