Nigeria’s downstream petroleum sector is witnessing a shift as increased competition has led to a significant reduction in diesel prices.
The Dangote Refinery recently took legal action after the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), granted five import licences to marketers for the importation of petroleum products.
Over the weekend, several vessels carrying imported petroleum products reportedly arrived in the country. In response, Dangote Refinery announced a reduction in the price of Automotive Gas Oil (AGO), commonly known as diesel, cutting the price by ₦200, from ₦1,800 to ₦1,600 per litre.
Industry observers view the price adjustment as a direct consequence of heightened competition within the sector.
The refinery’s pricing strategy is also believed to be aimed at undercutting recently imported products, as the new price falls below the landing cost incurred by importers.
Speaking on the development, Dr. Joseph Obele, National Public Relations Officer of the Petroleum Products Retail Outlets Owners Association of Nigeria and a lecturer at Ignatius Ajuru University of Education, described the move as evidence of the benefits of a competitive market.
He emphasized that increased competition in the petroleum industry would ultimately lead to better pricing for consumers, while cautioning against monopolistic practices.
“The reduction was reportedly aimed at creating market frustration for marketers who recently imported products from the international market, as the new selling price Dangote Refinery is significantly lower than the landing cost of the importers,” he said.
The development shows ongoing change in Nigeria’s energy market, where policy decisions and market forces continue to shape pricing and supply.
