Competition in Nigeria’s deregulated downstream petroleum market is becoming increasingly visible at filling stations, with motorists now paying different prices for petrol depending on the outlet they visit.
The latest price adjustments have created a situation in which the state-owned Nigerian National Petroleum Company Limited (NNPCL) is no longer automatically the cheapest option for motorists.
A market survey in Abuja and neighbouring areas on Tuesday, August 25, showed petrol selling between ₦1,230 and ₦1,299 per litre, depending on the filling station. NNPCL outlets were selling at ₦1,270 per litre, following a ₦20 increase from the previous ₦1,250 price
Among the major retailers surveyed, MRS was selling petrol at about ₦1,230 per litre after increasing its price by ₦20. This means motorists buying from MRS in affected locations could save about ₦40 on every litre compared with the new NNPCL price.
Other marketers, including Geregu, Ranoil, Emedab and Mobil, were also reportedly selling below the NNPCL rate at some locations.
However, prices were considerably higher at some independent outlets. Empire and AA Rano, for example, were reportedly selling petrol between ₦1,275 and ₦1,299 per litre.
The figures underline the growing price differences created by deregulation, with consumers increasingly having to compare filling stations rather than assuming that a particular brand will always offer the lowest price.
The latest developments have also been influenced by price changes at the Dangote Petroleum Refinery.
The refinery had reduced its petrol ex-gantry price to ₦1,165 per litre earlier in August, but subsequently increased it to ₦1,185 per litre on August 21. On August 26, the refinery again adjusted the price to ₦1,200 per litre, according to reports.
The successive adjustments have quickly filtered through the downstream market, prompting several marketers to review their pump prices.
Dangote’s expanded fuel-delivery initiative has also introduced another layer of competition, with the refinery supplying petrol to selected destinations, including Abuja, while offering logistics arrangements designed to reduce distribution costs.
The price differences are largely linked to how individual marketers source, transport and distribute their products.
Retailers that obtain petrol directly from domestic refineries or through favourable supply arrangements can have lower acquisition and transportation costs. Others purchase products through depots or intermediaries and may have to pay higher wholesale and logistics charges.
The timing of purchases can also affect prices. A filling station that bought its existing stock when wholesale prices were higher may continue selling at a higher rate until that inventory is exhausted.
Location is another important factor. Stations farther from major supply points can incur additional transportation costs, which may eventually be passed on to consumers.
The deregulated market gives marketers greater flexibility to adjust their margins according to supply conditions and competition in individual areas.
For consumers, the widening price gap means that shopping around could increasingly make a noticeable difference, particularly for motorists who buy large quantities of petrol.
For example, a motorist buying 100 litres at ₦1,230 per litre would spend ₦123,000, compared with ₦127,000 at a station selling at ₦1,270. The difference is ₦4,000.
The current trend also signals a major shift in Nigeria’s fuel market. Rather than relying solely on the NNPCL brand as a traditional reference for petrol prices, motorists are increasingly being encouraged to compare prices among NNPCL, major marketers and independent stations.
For now, MRS and some other private outlets appear cheaper than NNPCL in parts of Abuja, while some independent stations remain more expensive. However, prices can change quickly as refiners, depots and marketers respond to movements in crude oil prices, supply costs and logistics.
The emerging competition could ultimately benefit consumers if marketers continue competing on price, supply reliability and service quality.