Naira-for-Crude Policy Returns as Dangote Slashes Petrol Price to N865 — Marketers Warn of Potential Losses Amidst Price War
The Federal Government’s reinstatement of the naira-for-crude policy has sparked fresh price competition in Nigeria’s downstream petroleum sector, with the Dangote Refinery cutting its ex-depot petrol price to N865 per litre — a move that has led to a cascade of price reductions among independent marketers.
In response, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned operators to tread cautiously to avoid massive financial losses from abrupt price drops.
Marketers Slash Pump Prices
Following Dangote’s price cut on Thursday — a day after the naira deal was reinstated — marketers began adjusting pump prices. Notably, SGR reduced its retail price to N899/litre across its stations in Ogun State, undercutting Heyden, a Dangote partner, which now sells at N915/litre. Most stations across Lagos and Ogun have also trimmed prices to around N920–N930/litre, down from over N940/litre earlier in the week.
Sources said Dangote had planned to announce a major price drop on his 68th birthday (Thursday), but scaled it back due to the temporary halt of the naira-for-crude arrangement in March.
Price War and Market Shifts
Since December 2024, the Dangote Refinery, with its 650,000 barrels-per-day capacity, has upended the pricing structure of the downstream sector, traditionally dominated by the Nigerian National Petroleum Company Limited (NNPC). Now, it is often Dangote setting prices, with the NNPC reacting to remain competitive.
This shift has triggered a structural change in the Atlantic Basin gasoline market, according to Energy Intelligence, which noted that the Dangote refinery has “broken NNPC’s tight monopoly” and put pressure on European refining margins.
The revived naira-for-crude deal allows local refineries like Dangote’s to pay for domestic crude oil in naira rather than in U.S. dollars, giving them a pricing edge over importers, who must source forex.
Marketers, Importers Cautioned
IPMAN’s National Vice President, Hammed Fashola, has urged marketers and importers to exercise restraint. He warned that without real-time market data, sudden price cuts could push smaller players into debt.
“Marketers should play safe. Be sure of what’s happening before making purchases because prices can drop without notice,” he said.
Fashola maintained that while Dangote’s pricing moves are market-driven, the government should ensure a level playing field to avoid monopoly. He emphasized that “Dangote is not dictating prices, but promoting healthy competition.”
Still, importers claim they are bleeding financially. One anonymous importer told The PUNCH that during the peak of the Dangote price drops (from N1,100 to N860/litre), some companies lost up to N76.5bn in one month, an average of N2.5bn daily, due to sudden, unpredictable price changes.
Mixed Reactions to Naira Deal
While Dangote’s rivals and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) opposed the naira deal, claiming it granted unfair advantage, the Federal Government reinstated it in April 2025 after petrol prices spiked when the deal was suspended in March.
DAPPMAN previously urged the government to cancel the deal entirely, arguing it undermines importation and distorts competition. However, crude refinery operators have countered that the naira deal is essential for supporting local refining and could eventually bring petrol prices down to N350/litre if global crude prices fall to $50 per barrel.
Experts Urge Regulatory Oversight
Energy experts agree that a balance must be struck to prevent a market dominated by one refinery. Henry Adigun and Israel Aye emphasized the role of regulatory bodies like the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Federal Competition and Consumer Protection Commission (FCCPC) in curbing anti-competitive practices.
“We must guard against a monopoly. Let’s keep the market open and competitive for the benefit of consumers,” said Adigun.
Awaiting NNPC Response
As prices continue to fall, attention is now on the NNPC, which is yet to announce its next move. Repeated attempts to reach NNPC spokesperson Olufemi Soneye were unsuccessful at the time of reporting.
The coming weeks may determine whether Nigeria’s deregulated fuel market can sustain fair competition—or slide into single-player dominance.