Petrol price seen crashing to N800/l as marketers sign new deal with Dangote

Relief is finally on the horizon for Nigerian motorists, as pump prices are projected to plunge to N800 per litre or lower. This anticipated price crash is driven by a landmark agreement allowing the Independent Petroleum Marketers Association of Nigeria (IPMAN) to bypass middlemen and lift petrol directly from the Dangote Petroleum Refinery.

For years, independent marketers (who control roughly 70 percent of Nigeria’s retail filling stations) relied heavily on third-party private depots to source their products. By eliminating these intermediaries, marketers can significantly cut costs and pass the savings directly to consumers.

Abubakar Maigandi Shettima, IPMAN’s National President, confirmed the development on Monday during a meeting in Abuja, noting that the direct supply chain is a game-changer for domestic energy pricing. Consumers are already feeling the initial effects, with pump prices dropping by N125 per litre nationwide. As the direct supply stabilises, Shettima assured Nigerians that the association is prepared to drive prices below the N800 mark, provided marketers can still maintain a reasonable profit margin.

He said, “Reducing the price depends on the way we buy the product from the private depot owners and Dangote refinery. And I thank God now that the Dangote refinery has accepted independent petroleum marketers to start purchasing their product directly. So, it’s a plus.

“At any time when there is a reduction of price, we are ready to reduce the price to even below N800, not even N900.”

Shettima explained that Nigerians will begin to see a gradual reduction in petrol prices, provided that marketers mark up their margins and make a profit from their sales.

“Likewise, now, we have started reducing the price, if you observe very well. So, the price is coming down, and I assure Nigerians that independent petroleum marketers are ready to crash down the price at a required rate.

Shettima emphasised that beyond domestic sourcing, the association is pushing for total deregulation that allows its members equal access to both local production and international supply chains to guarantee energy security.

The association urged the Federal Government to sustain its support for the Dangote refinery while simultaneously creating an enabling environment for other modular and private refineries to come online.

“Our major concern is a balanced distribution ecosystem. We want a situation where IPMAN buys directly from the Dangote refinery, but also, if we request licenses for importation, independent marketers should be allowed to import by themselves.

“Let the government allow the local refinery to function properly, and assist those who intend to do refining too,” Shettima added.

The anticipated price drop aligns with mounting pressure from the Federal Government. Despite a recent global downturn in crude oil prices, Nigerian retail stations have stubbornly maintained elevated pump prices, with petrol still selling for as high as N1,296 per litre in some areas.

Heineken Lokpobiri, minister of Petroleum Resources (Oil), criticised this market disconnect.

He explained that even though PMS pricing is influenced by several factors beyond crude oil prices, it is important to distinguish between genuine replacement cost and windfall gains arising from inventory management.

“While considerable progress has been made in moderating inflation from the highs experienced in 2024 at 34 percent, the latest figures show that inflation currently stands at 15.9 percent. Sustaining high energy costs where underlying market fundamentals have improved risks undermining these gains.

“Temporary gains realised from inventories acquired at higher prices should not become the basis for sustaining elevated pump prices after replacement costs have declined. As inventories are replenished at lower costs, the benefits of those lower costs should be transmitted to consumers in a timely and transparent manner. That is the essence of a competitive and efficiently functioning market,” he said.

The minister, noting the Federal Government’s commitment to protect public interest post-deregulation, said that deregulation was never intended to create opportunities for excessive pricing or market distortions but rather promote efficiency, deepen competition and ultimately deliver value to Nigerians.

Also speaking, Rabiu Umar, Authority Chief Executive (ACE) of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), stressed the need to ensure cost-reflective and fair pricing of petroleum products, particularly petrol.

He noted that over the past six months, the country navigated considerable volatility in the international crude oil market with increases in prices due to heightened geopolitical tension and global conflicts.

“Recently, we have witnessed a welcome easing of those tensions, which has driven a downward shift and moderation of global crude prices. However, our domestic retail market has not yet harmoniously adjusted to these downward shifts.

“As a responsible regulatory authority, it is our duty to step in alongside you, our valued partners, to interrogate the market forces, understand the operational bottlenecks, and directly address this disconnect between falling replacement costs and sustained retail prices,” he said.

Umar, speaking further, said that deregulation is not licensed for market distortion or unfair consumer pricing but a measure intended to drive efficiency, maximise value, and protect the public interest.

He stressed the need to build a transparent ecosystem where the benefits of market improvements are passed on to the Nigerian consumer in a timely and fair manner, whilst protecting the sustainability of businesses.

“Our objective today is not to dictate, but to collaborate. We want to engage in an open, transparent, and solution-oriented dialogue. We want to hear your challenges, discuss market surveillance, look into inventory management, and align on how we can collectively accelerate key mechanisms like the National Strategic Stock to protect our energy security.”

“Just two weeks ago, many of us gathered in a similar forum to discuss the domestic gas sector. The candid dialogue and the actionable wins we secured during that session are already bearing fruit.

“Notably, we have seen LPG prices coming down significantly across the market, and we look forward to seeing even more reduction within the next two weeks. It is exactly this kind of tangible success that inspired today’s gathering,” he added.