Who really sets Nigeria’s petrol price as importers quote N1,350 per litre?

Independent oil marketers have accused major fuel importers of setting imported petrol prices at about N1,350 per litre, far above the price offered by the Dangote Petroleum Refinery.

The marketers said the price gap has weakened the government’s plan to use fuel imports to increase competition and moderate domestic petrol prices.

Chinedu Ukadike, national publicity secretary of the Independent Petroleum Marketers Association of Nigeria, said recent import licences issued to companies including AA Rano and Matrix Energy had failed to deliver cheaper products.

He called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority to review the licence, pricing structure, and growing use of dollar-denominated transactions in the downstream market.

The dispute comes as many marketers slow large-volume petrol purchases while waiting for clarity on Dangote Refinery’s latest pricing template and the landing cost of imported fuel.

Import licences fail to lower prices

The Federal Government allowed more companies to import petrol as part of efforts to prevent one supplier from controlling the market.

The policy aimed to create competition between imported products and fuel refined locally.

Ukadike said that objective had not been achieved because imported petrol now costs more than fuel supplied by Dangote Refinery.

“We were shocked that companies given licences to import petroleum products are trying to peg prices at N1,350 per litre,” he said.

He argued that the price was significantly higher than what independent marketers had been paying for Dangote petrol.

According to him, import licences were expected to provide a price check on local refineries. Instead, importers have brought in products at prices that could raise costs for retailers and consumers.

The association also questioned the quality of some imported products, although it did not provide laboratory results or regulatory findings to support the claim.

AA Rano and Matrix Energy had not publicly responded to the allegations at the time of the original report.

Marketers face uncertainty over new supply costs

Independent marketers operate thousands of filling stations across Nigeria, but many lack the financial capacity and storage infrastructure of larger companies.

A sharp difference between domestic and imported petrol prices therefore affects their ability to plan purchases and set pump prices.

Marketers who buy at N1,350 per litre must add transportation, financing, and operating costs before selling to consumers.

That could place retail prices above the levels offered by stations sourcing directly from Dangote Refinery.

Ukadike said the continued price volatility had created uncertainty across the downstream market.

Marketers now face uncertainty across the board; they have to choose between waiting for lower domestic prices and buying imported fuel at a higher cost to maintain supply.

The uncertainty could also slow depot activity as operators delay purchases to avoid holding expensive stock during a possible price reduction.

Dollar pricing adds pressure to the market

IPMAN also raised concerns about the sale of petroleum products in dollars.

Ukadike said dollar-based transactions increase marketers’ exposure to exchange-rate movements and make petrol pricing less predictable.

He noted that the naira was approaching N1,400 to the dollar, increasing the cost of importing fuel and financing offshore purchases.

Imported petrol requires foreign exchange for the product, shipping, insurance, and other charges. Importers often pass these costs to depot owners and retail marketers.

Ukadike said Nigeria could reduce this pressure by supporting domestic refining and continuing the sale of crude oil to local refineries in naira.

He urged the government to engage Dangote Refinery and maintain the crude-for-naira arrangement.

According to him, imported petroleum products priced against international Platts benchmarks cost about 20 percent more than Dangote’s supply.

He said importing petrol through trading hubs such as Lomé at higher prices increases demand for dollars and places further pressure on the naira.

How Dangote pricing reshapes competition

The Dangote Petroleum Refinery has significantly altered Nigeria’s downstream market since it began supplying petrol locally.

Its large production capacity gives it the potential to reduce Nigeria’s dependence on imported fuel and lower shipping-related costs.

However, marketers have repeatedly raised concerns about price changes, supply terms and access to products.

Some operators fear that excessive dependence on one refinery could weaken competition. Others argue that imported fuel cannot compete effectively when foreign exchange and shipping costs remain high.

The current dispute reflects that tension.

The government wants imports to prevent market dominance, but expensive imports may fail to reduce prices. At the same time, relying heavily on Dangote could give the refinery greater influence over domestic supply and pricing.

Regulators must therefore balance competition with the need to protect consumers from avoidable costs.

Government pushes marketers to cut pump prices

The Federal Government recently held talks with downstream operators over petrol pricing and competition.

The meeting included representatives of Dangote Refinery, the Federal Competition and Consumer Protection Commission, IPMAN and the Petroleum Products Retail Outlets Owners Association of Nigeria.

Major marketers and industry groups such as the Major Energy Marketers Association of Nigeria, the Depot and Petroleum Products Marketers Association of Nigeria, and the Nigerian Association of Road Transport Owners also attended.

The talks followed a directive from Heineken Lokpobiri, minister of state for petroleum resources, who asked marketers to reduce pump prices in line with changes in the international crude market.

Officials of the NMDPRA discussed pricing, competition, and supply conditions with the operators.

The government said the talks formed part of efforts to ensure that domestic petrol prices reflect market conditions.

However, marketers argue that retail prices cannot fall meaningfully when some importers sell petrol at N1,350 per litre.

Why this matters

The dispute could determine whether Nigerians receive lower petrol prices or face another increase at filling stations.

Petrol prices affect transport fares, food distribution, household spending and the operating costs of businesses.

When depot prices rise, retailers usually pass the increase to consumers. Higher fuel costs then spread across the economy and add to inflation.

The controversy also raises questions about the government’s import strategy.

Import licences can improve competition when multiple suppliers offer products at competitive prices. But they provide little benefit when imported fuel costs more than locally refined petrol.

The government must also consider the foreign exchange impact.

Every imported cargo requires dollars that could otherwise support other sectors. Increased fuel imports may therefore weaken the naira and push landing costs even higher.

Domestic refining offers a possible solution, but regulators must ensure that local producers compete fairly and do not gain excessive control over pricing.

Regulators face a difficult balancing act

The NMDPRA now faces pressure to explain how it evaluates import licences and whether the policy is lowering supply costs.

It must also determine whether imported petrol meets required quality standards and whether marketers are engaging in anti-competitive pricing.

The regulator should publish clearer information on import volumes, landing costs and approved suppliers. Greater transparency would allow consumers and market operators to understand why prices differ sharply.

Nigeria’s downstream market will struggle to achieve stable pricing while import costs remain high, exchange rates fluctuate and domestic suppliers frequently adjust their prices.

The government must choose a policy that encourages competition without forcing consumers to pay for expensive imports.

For independent marketers, the priority remains access to petrol at a price that allows them to operate profitably without pushing pump prices beyond the reach of consumers.