Some oil marketers are rebranding their filling stations, removing the NNPCL logo, as they abandon franchise agreements with the Nigerian National Petroleum Company Limited (NNPCL) due to fierce price competition in the downstream oil sector. This shift follows the dramatic price drop in refined products by Dangote Petroleum Refinery, valued at $20 billion, based in Lekki.
Dealers, particularly in Lagos, are increasingly opting out of their contracts with NNPCL, seeking cheaper alternatives. Some stations, once branded NNPCL along the Lagos-Ibadan expressway, have already rebranded under private oil marketers. These changes reflect a new drive for more affordable off-take as the deregulation of the oil sector intensifies competition.
The price war began after Dangote reduced its loading cost from N950 to N890 per litre, making it a more attractive option compared to imported petrol. Marketers are now choosing cheaper sources from Dangote’s refinery or other suppliers, as they aim to offer lower retail prices and secure a better profit margin.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association, confirmed that the shift is due to NNPCL no longer being the sole distributor of refined products. With Dangote offering lower rates, marketers have rebranded their stations to access cheaper fuel. Independent marketers, for instance, now favor stations like MRS, which offers cheaper fuel than NNPCL.
Oil and gas expert Olatide Jeremiah noted that marketers previously turned to NNPCL’s franchise to access fuel at a lower cost but are now abandoning the national company due to the emergence of Dangote’s more competitive pricing model. The franchise license was also an avenue to earn more by re-selling fuel at higher prices across multiple stations.
According to Lagos PETROAN Chairman Akinola Ogunyolemi, many of the rebranded outlets are privately owned, and the decision to remove the NNPCL logo is either due to contract expiration or a more profitable offer from another company.
More stations may drop their NNPCL affiliation as Dangote’s refined petrol is now priced lower than the landing costs of imported products, which have risen to N910 per litre.
In response to the global decline in crude prices, Dangote Petroleum Refinery recently reduced its ex-depot price of petrol from N950 to N890 per litre. This price cut, along with ongoing market fluctuations, is further intensifying competition between NNPCL, Dangote, and private marketers, with more price wars expected as deregulation continues.
Marketers, aware of the lower costs from Dangote and other sources, are adapting quickly to stay competitive in the market, with some even sourcing cheaper imports to keep up with the price competition.
