A price war has broken out in Nigeria’s downstream petroleum sector as retail fuel marketers across the country begin selling Premium Motor Spirit (petrol) at prices below the N739 per litre benchmark announced by the Dangote Petroleum Refinery.
The development is being driven largely by intense competition among fuel retailers seeking to attract and retain customers in a highly competitive market. Several filling stations, particularly in major cities, have slashed pump prices by varying margins, forcing rival outlets to respond with similar reductions to avoid losing patronage.
Industry operators say the price cuts are putting significant pressure on retailers, especially independent marketers who purchase fuel at higher landing or wholesale costs. Many of them are reportedly selling at little or no profit, while some are operating at outright losses in order to remain in business.
While motorists have welcomed the lower fuel prices, petroleum experts warn that the sustained price war could have negative consequences for the sector. According to them, prolonged below-cost pricing may force smaller marketers out of the market, reduce competition in the long term and potentially disrupt fuel supply in some areas.
There are also concerns that the situation could lead to hoarding or temporary station closures if retailers are unable to replenish stocks profitably. Stakeholders are therefore calling for clearer pricing guidelines and improved market stability to prevent further strain on operators.
As the competition continues, analysts say the coming weeks will determine whether the market settles at a new price level or whether further adjustments will be needed to balance affordability for consumers with sustainability for fuel retailers.
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