In a significant shift within Nigeria’s downstream oil sector, several oil marketers have begun removing the Nigerian National Petroleum Company Limited (NNPCL) logo from their filling stations.
This comes as independent dealers move away from franchise agreements with the state-owned oil giant, citing fierce price competition following a recent reduction in refined product prices by the Dangote Petroleum Refinery.
Sources indicate that many marketers, particularly those based in Lagos, are rebranding their stations in response to a recent price drop by the Dangote refinery, which slashed its ex-depot price for Premium Motor Spirit (PMS) from N950 to N890 per litre, effective from 1st February 2025.
This price reduction, attributed to a favourable outlook in global energy markets and a drop in international crude oil prices, has had a profound impact on the competitive landscape.
Independent marketers, who previously relied on NNPCL for their supply of refined products, are now seeking to secure cheaper alternatives from Dangote and other importers.
This change follows the deregulation of the downstream oil sector, which has opened up new opportunities for independent players to source cheaper products and gain a competitive edge.
Some filling stations previously affiliated with NNPCL, particularly along the Lagos-Ibadan Expressway in areas like Wawa and Ibafo, have already removed the NNPCL logo in favour of private brands.
Marketers are now rebranding their stations under other brands, such as MRS, which are offering more competitive pricing.
Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), confirmed this trend, explaining that the shift is a strategic move as NNPCL is no longer the sole importer and distributor of refined products.
Marketers now have the option to purchase directly from Dangote, whose prices are lower than the landed costs of imported petrol, leaving the national oil company struggling to maintain its influence in the market.
“The deregulation of the sector has levelled the playing field, Marketers are changing and rebranding because, in the past, NNPCL was the exclusive distributor, but now other players, especially Dangote, offer cheaper products, and marketers are looking for better alternatives.” Ukadike said in an interview.
Oil and gas expert Olatide Jeremiah further explained that the emergence of the Dangote refinery has disrupted the business model that allowed marketers to profit from NNPCL’s price control mechanisms. Previously, some marketers had paid millions for a franchise licence to access NNPCL’s products at a cheaper rate, but with Dangote now selling at lower prices, many are opting out of their agreements with the state-owned oil firm.
“NNPCL was the primary source of cheaper petrol for many marketers before Dangote entered the scene, However, since Dangote’s prices are now more competitive, the franchise model that once worked for marketers is no longer as attractive.” said Jeremiah, who is the CEO of petroleumprice.ng.
Akinola Ogunyolemi, Chairman of the Petroleum Tanker Drivers Association in Lagos State, highlighted that many of the filling stations rebranding are not owned by NNPCL but are operated by independent marketers under franchise agreements.
These agreements, which are renewable, are often abandoned when the terms are no longer favourable.
While NNPCL did not respond to requests for comment on the growing trend of rebranding, experts believe that the continued reduction in prices by Dangote is likely to lead to more marketers abandoning their affiliations with the national oil company.
According to recent data, the landed cost of imported petrol now exceeds the price of petrol from Dangote, making it less appealing for marketers to continue sourcing products from NNPCL.
In addition to the price reduction by Dangote, industry analysts suggest that ongoing competition between the refinery, NNPCL, and other private marketers will intensify, with more price wars expected.
It was recently reported that the cost of landing PMS at some depots has surged to N939 per litre, significantly higher than the price of Dangote’s refined products.
As the oil sector continues to evolve, marketers are being forced to adapt, and many are choosing to distance themselves from NNPCL’s brand, preferring to align with private players that offer better pricing and more favourable terms.
