Some oil marketers are gradually removing the Nigerian National Petroleum Company Limited (NNPCL) logo from their filling stations as they opt out of franchise agreements due to intense competition in refined product pricing.
Reports indicate that many Lagos-based dealers are considering a similar move following the recent price reduction by the $20 billion Dangote Petroleum Refinery in Lekki. Several stations along the Lagos-Ibadan Expressway and Ibafo have already rebranded, shedding the NNPCL name in pursuit of cheaper products.
Competition Driving Change
The deregulation of the downstream oil sector has heightened competition, prompting independent marketers to seek cost-effective product sources. The latest development comes after Dangote Refinery slashed its loading price of Premium Motor Spirit (PMS) from ₦950 to ₦890 per litre, significantly undercutting NNPCL’s imported petrol prices.
According to Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), marketers are shifting alliances because NNPCL no longer holds a monopoly on petroleum importation and distribution.
The Shift in Franchise Agreements
A franchise licence in the oil sector allows marketers to operate under an established brand, ensuring product supply. However, with Dangote’s lower prices, many marketers see greater profitability and flexibility outside of NNPCL agreements.
Oil and gas expert Olatide Jeremiah explained that NNPCL previously controlled fuel pricing by subsidizing petrol internally. This made marketers seek NNPCL franchise licences to access cheaper products. However, Dangote’s entry disrupted this strategy, making direct purchases more attractive.
More Stations May Rebrand
Lagos PETROAN Chairman, Akinola Ogunyolemi, confirmed that most filling stations displaying the NNPCL logo are privately owned. He noted that station owners often rebrand when contracts expire or better offers emerge.
Industry analysts predict that more stations will switch allegiances as imported fuel prices remain higher than Dangote’s locally refined petrol.
Meanwhile, a fresh price war has emerged between Dangote, NNPCL, and other major marketers. The NNPCL and other importers recently sourced cheaper refined products internationally, prompting Dangote Refinery to lower its price to remain competitive.
Experts anticipate further price adjustments as competition intensifies, shaping the future of Nigeria’s downstream oil market.
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