Why Cheaper Fuel From Dangote May Not Last in Nigeria – Retailers, Marketers

The recent drop in petrol prices across Nigeria gave many people a moment of relief. From Abuja to Lagos, motorists rushed to filling stations as pump prices fell to between N885 and N945 per litre, depending on the station. 

For a country battling inflation and rising living costs, any reduction feels like a blessing.

But petroleum retailers and marketers say Nigerians should not be celebrating just yet. 

According to them, the lower price is not a sign of real stability. Instead, it is a warning that something deeper is wrong in the downstream oil sector.

A Price Drop That Didn’t Come From Real Market Changes

The federal government recently suspended its planned 15% import duty on petrol and diesel, and around the same time, Dangote Refinery reduced its November ex-depot price from N877 to N828 per litre. 

This combination pushed pump prices down nationwide. But the excitement didn’t last long.
As of Monday morning, the ex-depot price has already gone back up, reaching:

• N854 per litre from Dangote Refinery and Pinnacle
  
• N860 per litre from other depot owners
  

This quick rebound has strengthened the argument from industry stakeholders: the price cut was temporary and artificial.

“These Prices Are Not Real” — PETROAN

Billy Gillis-Harry, President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), said the current price reduction has nothing to do with supply and demand or general market conditions.

According to him, petrol pricing in Nigeria is “not guided by fair market principles.” That means the price looks good on the surface, but it is not backed by real economic factors.

Gillis-Harry warned that when pump prices are pushed down artificially, marketers suffer the most. Many of them may soon lack the capital to keep buying products. And once they cannot restock, the country could face:

• shortages,
  
• sudden price hikes, or
  
• another round of nationwide scarcity.
  

He stressed that the market needs “right pricing and honest value,” not forced prices that hide deeper issues.

Another concern he raised is the country’s growing dependence on one major supplier, Dangote Refinery. In his view, when a single refinery influences the entire price structure, the market becomes fragile. If anything changes at that refinery, the whole country feels it.

Deregulation Exists Only on Paper — IPMAN

The Independent Petroleum Marketers Association of Nigeria (IPMAN) agrees that the current situation is not sustainable, but they highlight a different issue: Nigeria is not truly deregulated.

Under the Petroleum Industry Act (PIA), the downstream market is supposed to operate on a free-market system where sellers and buyers negotiate prices. But IPMAN’s spokesperson, Chinedu Ukadike, says that is impossible in a market where Dangote Refinery is the only active domestic supplier.

With the Port Harcourt, Warri, and Kaduna refineries still inactive, Nigeria lacks the competition needed to keep prices stable.

According to him:

• A real deregulated market has multiple suppliers.
  
• Buyers can choose where to purchase products.
  
• Competition helps keep prices balanced.
  

Right now, none of that exists.
Nigeria has what experts call a false equilibrium, a temporary period where prices look stable but are not backed by strong market fundamentals.

Any small disruption can cause the entire system to shake.

A Market Sitting on a Weak Foundation

Both PETROAN and IPMAN point to the same core dangers:

• Dependence on one refinery puts the whole country at risk.
  
• Marketers may soon struggle to afford product purchases.
  
• Artificially low prices can lead to shortages when marketers can no longer sustain supply.
  
• Deregulation cannot work unless other refineries—public and modular—join the market.
  

This means the low prices Nigerians are enjoying right now are more like a distraction. The real issues remain: weak competition, a fragile supply chain, and a pricing system that does not follow market logic.

What Nigeria Must Do

Nigeria is stuck between two systems:

• Deregulated on paper
  
• Highly dependent in reality
  

This middle ground creates confusion and price instability.

Experts say the way forward includes:

• Restoring public refineries to full operation
  
• Supporting modular refineries to increase supply
  
• Encouraging real competition among multiple players
  
• Ensuring pricing reflects actual market conditions
  

Until these steps are taken, Nigeria will keep swinging between short-term relief and long-term crises.