Oil marketers in Nigeria have begun removing the Nigerian National Petroleum Company Limited (NNPCL) logo from their filling stations, opting out of franchise agreements due to intense competition in the downstream oil sector.
This shift is primarily driven by the recent reduction in petrol prices by Dangote Petroleum Refinery, which has made its refined products cheaper than imported alternatives.
Key Developments
- Several filling stations along the Lagos-Ibadan Expressway, including locations in Wawa and Ibafo, have removed the NNPCL logo and are rebranding under private oil marketers.
- Many independent petroleum marketers are considering switching suppliers to ensure they source fuel at cheaper rates, following Dangote Refinery’s decision to lower its petrol price from ₦950 to ₦890 per litre.
- The Dangote refinery’s product is now cheaper than the landing cost of imported petrol, leading to a shift in market dynamics.
Why Marketers Are Leaving NNPCL Franchise
According to the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, the primary reason for the shift is NNPCL’s loss of monopoly as the sole importer and distributor of petrol.
"There was a time when NNPCL was the only distributor of petrol, and marketers had to franchise their filling stations under NNPCL to ensure a steady supply. But now, with the entry of Dangote Refinery, marketers can buy fuel at a cheaper rate from multiple sources," Ukadike explained.
He further noted that some marketers have switched to MRS and other private fuel brands, as they now offer more competitive prices than NNPCL.
Experts Confirm Market Shift
An oil and gas expert, Olatide Jeremiah, explained that the emergence of Dangote Refinery has disrupted NNPCL’s ability to control petrol prices, leading many marketers to revoke their franchise agreements.
"Initially, independent marketers paid millions to secure NNPCL franchise licenses so they could load at cheaper rates. But now that Dangote Refinery offers a better price, marketers are abandoning their agreements with NNPCL," Jeremiah said.
Pricing Competition and Deregulation Impact
Recent data from the Major Energies Marketers Association of Nigeria (MEMAN) shows that:
- The spot landing cost of imported petrol has surged to ₦910.14 per litre at the ASPM depot and ₦910.52 per litre at the NPSC depot.
- The 30-day average cost of petrol has risen to ₦939.03 per litre.
With Dangote Refinery selling at ₦890 per litre, its local production is undercutting imported fuel prices, prompting a pricing war among marketers and depot operators.
NNPCL’s Response and Marketers’ Future Plans
Attempts to contact NNPCL spokesperson Femi Soneye for comments were unsuccessful. However, sources suggest that NNPCL is struggling to retain its market share as more dealers opt for cheaper alternatives from Dangote and private importers.
What’s Next?
- More marketers may abandon NNPCL franchise agreements in favor of lower-priced suppliers.
- Petrol prices could continue fluctuating due to increased competition between Dangote Refinery, NNPCL, and private importers.
- Regulatory interventions may emerge as authorities monitor the impact of deregulation on fuel pricing and supply chains.
This new era of competition in Nigeria’s downstream oil sector is reshaping market dynamics, forcing players to adapt to changing supply sources and pricing structures.
