In a significant shift within Nigeria’s downstream oil sector, several oil marketers are abandoning their franchise agreements with the Nigerian National Petroleum Company Limited (NNPCL), rebranding their filling stations as competition intensifies with Dangote Petroleum Refinery. This development marks a pivotal moment in the evolving dynamics of Nigeria’s refined petroleum market.
Hobnob News has gathered that numerous marketers, particularly in Lagos and its environs, are opting to remove the NNPCL logo from their stations. This move comes on the heels of Dangote Petroleum Refinery’s aggressive pricing strategy, which has seen the cost of refined products plummet, making it increasingly challenging for NNPCL to retain its franchise partners.
Stations previously adorned with the NNPCL brand along key routes like the Lagos-Ibadan Expressway and Ibafo have already undergone rebranding. Independent marketers are keen to capitalize on cheaper product offerings as the deregulated market fosters heightened competition. The shift is particularly pronounced in Lagos, where private oil marketers are seizing the opportunity to offer more competitive prices.
The catalyst for this migration appears to be Dangote Refinery’s recent decision to slash its Premium Motor Spirit (PMS) loading cost from N950 to N890 per litre. This undercuts the landing cost of imported petrol, prompting marketers to seek more favorable supply arrangements. Industry insiders confirm that this rebranding trend is a tactical maneuver by marketers to source cheaper products from Dangote and other import channels.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, validated these developments in an exclusive interview with Hobnob News. Ukadike explained that the traditional reliance on NNPCL for petroleum supply has diminished as Dangote’s refinery introduces more competitive pricing.
“Previously, NNPCL was the sole importer and distributor of petrol, so marketers needed franchise agreements to secure products,” Ukadike stated. “Now, the market has opened up. Marketers are rebranding to align with suppliers like MRS, which currently offers better prices than NNPCL.”
Franchise agreements in the oil sector typically allow marketers to operate under a larger brand’s name in exchange for fees or revenue sharing. However, with NNPCL no longer holding a monopoly on fuel imports, many marketers see little value in maintaining these agreements if they can secure better deals elsewhere.
Efforts to obtain comments from NNPCL spokesperson Femi Soneye were unsuccessful, as messages sent to his phone remained unanswered.
Industry expert Olatide Jeremiah, CEO of petroleumprice.ng, corroborated this shift, attributing it to the changing market landscape post-subsidy removal and the emergence of Dangote Refinery.
“After the subsidy removal, NNPCL was tasked with managing fuel prices to prevent excessive increases,” Jeremiah noted. “While they pegged prices at N500 per litre, the actual landing cost was higher, causing losses for independent importers. Dangote’s entry disrupted this model, offering lower prices directly to marketers.”
Jeremiah explained that marketers previously paid substantial sums for NNPCL franchise licenses, allowing them to purchase fuel at subsidized rates from NNPCL depots. However, with Dangote now offering even lower prices, these licenses have lost their appeal.
Akinola Ogunyolemi, Chairman of the Petroleum Dealers Association of Nigeria (PETROAN) in Lagos, highlighted that most of the rebranded stations were never owned by NNPCL.
“These stations are privately owned. When their contracts with NNPCL expire or more lucrative offers emerge, owners naturally switch affiliations,” Ogunyolemi explained. “It’s a matter of business pragmatism.”
The trend is expected to continue as imported petrol remains costlier than Dangote’s locally refined products. According to the latest data from the Major Energies Marketers Association, the on-spot landing cost of PMS has surged to N910.14 per litre at the ASPM depot and N910.52 at the NPSC depot. The 30-day average stands even higher at N939.03 per litre.
In a statement signed by Anthony Chiejina, Group Chief Branding and Communications Officer of Dangote Petroleum Refinery, the company attributed its price reduction to favorable global energy market conditions and a recent drop in international crude oil prices.
“Effective from February 1, 2025, Dangote Petroleum Refinery has reduced the ex-depot price of PMS from N950 to N890 per litre,” the statement read. “This adjustment reflects our commitment to passing on the benefits of global market improvements to Nigerian consumers.”
As the downstream oil sector continues to adapt to these changes, the rebranding wave among marketers signals a broader shift towards competitive pricing and market-driven supply chains. For now, Dangote’s strategic positioning appears to be reshaping the landscape, challenging NNPCL’s dominance, and offering consumers the prospect of more affordable fuel prices.
