\n<\/p>\n
The cost of fuel in Nigeria has increased by almost 2000% in the last decade. The percentage might be surprising, but that\u2019s our Nigerian<\/a> reality. The major cause of this steep increase was the removal of fuel subsidies by the government<\/a>.<\/p>\n Despite the government\u2019s rationale and the supposed benefits of the withdrawal of the fuel subsidy, the fuel price hike has had devastating effects on the livelihood of Nigerians. Nigerians rely heavily on petroleum for the transportation of people and goods, and thus, an upward adjustment in the price of fuel automatically increases the price of goods. As a result, the standard of living in Nigeria has fallen, and the poverty level has increased.<\/p>\n In the wake of the overwhelming suffering sweeping across Nigeria due to the high price of fuel, Dangote Refinery and the Nigerian National Petroleum Commission (NNPC) are facing stiff competition.<\/p>\n Nigeria has relied on other more powerful and endowed countries for petroleum even though Nigeria is one of the world\u2019s foremost producers of crude oil. This served to account for petroleum products\u2019 high prices in Nigeria. So when Dangote, the richest man in Nigeria, came out to say he was going to establish an oil refinery, Nigerians were jubilant. It was a significant event in the history of Nigeria.<\/p>\n Though the price of fuel has not really changed that much, one thing that is changing is the monopoly of the Nigerian National Petroleum Commission in the sales of petroleum products in Nigeria. Dangote Refinery is now a serious competitor and the rivalry between NNPC and Dangote Refinery is quite evident.<\/p>\n So much has powered this rivalry, and in many cases, it is hard to separate the lie from the truth. In this article, I will put the two giants in the oil industry in Nigeria side by side, and unveil truths and lies in the stories running on the internet and by word of mouth.<\/p>\n NNPC is a state-owned enterprise and the only company with a license to operate in the petroleum industry within the country. The NNPC is the largest national oil company in Africa<\/a>, holding assets<\/a> worth $153 billion (USD).<\/p>\n Dangote Refinery is a refinery owned by Dangote Group. It was opened on 22 May 2023 in Lekki, Nigeria. It will be the largest single-train refinery in the world upon completion, processing about 650,000 barrels of crude oil per day.<\/p>\n Nigerians had expected the price to go down when Dangote Refinery fuel entered the market in September 2024. On the contrary, NNPC did the opposite by increasing the price of fuel by 11%. Dangote maintained that it had sold to NNPC at prices lower than imported competitors, so no one could justify the reason for the price increase.<\/p>\n Dangote Refinery reduced the price of its fuel from N970 to N899.50 per liter on December 19, 2024. As a result, NNPC Limited reduced the price of its fuel to N899 per liter.<\/p>\n The price of Dangote Refinery fuel increased to N950 in January 2025 and decreased again to N880 in February 2025.<\/p>\n The Nigerian National Petroleum Company Limited (NNPCL) also cut the pump price of their fuel, seemingly in reprisal for Dangote Refinery\u2019s price reduction.<\/p>\n In order to gain market share, industry players observed that Dangote and NNPCL were already running at a loss. They speculate that the price reduction is a reaction to market forces and a move to lessen the economic burden on Nigerians.<\/p>\n Interdependent pricing, a feature of an oligopoly, is what the two giant firms, Dangote and NNPCL, are using. While most of the fuel retailers and companies in Nigeria buy fuel directly from Dangote Refinery, most of the fuel sold by NNPCL is imported.<\/p>\n Instead of utilizing its refineries to compete with Dangote, the NNPC is utilizing imported fuel. This has indirect effects on the macroeconomic framework and influences the stability of the exchange market.<\/p>\n In order to guarantee that Nigerians would enjoy cheaper petrol prices, Dangote had said it would absolve N16 billion in losses by returning N65 per liter to dealers.<\/p>\n This is just the start. Fuel prices can return to pre-May 2023 within five to 10 years as more private investors begin refining locally. The price war afterward benefited Nigerians because it lowered the cost of petroleum.<\/p>\n There is a rumor going around that the fuel from NNPCL burns more quickly than fuel sold from the Dangote refinery.<\/p>\n These rumors were deriv<\/a>ed from a TikTok<\/a> video from @valorreviews, where a young man was contrasting the burn rates of MRS and NNPC PMS, making use of two tiny tiger generators, which Nigerians call \u201cI better pass my neighbor generators.\u201d<\/p>\n In the young man\u2019s review, the MRS Dangote-refined fuel is N20 cheaper and longer-lasting compared to the PMS at NNPC stations.<\/p>\n Because they are in collaboration with Dangote Refinery, MRS gas stations can dispense locally refined gasoline.<\/p>\n The NNPC fuel-powered generator stopped running after 17 minutes and 51 seconds while the MRS fuel-powered generator continued to run for 30 minutes, outlasting the NNPC fuel by a whole 13 minutes.<\/p>\n The Nigerian National Petroleum Company (NNPC) Limited dispelled allegations that fuel from MRS lasts 13 minutes longer than NNPC\u2019s.<\/p>\n NNPC explained that in order to provide customers with the highest possible efficiency, durability, and environmental sustainability, NNPC meticulously formulates its gasoline with one of the best compositions.<\/p>\n NNPC Limited also claimed that the Dangote Refinery is the source of a large volume of the Premium Motor Spirit (PMS) that is being dispensed at NNPC retail stations in Lagos, where the video was recorded.<\/p>\n Although the experiment is flawed in methodology and cannot therefore be trustworthy, the 13-minute difference is significant, and this has slanted the preference of Nigerians toward MRS. No official scientific experiment has been conducted to disprove or validate the claims, and thus the use of the fuel from MRS or NNPC is left to the choice of Nigerians.<\/p>\n The rivalry between NNPC Limited and Dangote Refinery Limited is a blessing to Nigerians. Not only is the price of fuel low, but the two companies are bent on providing fuel of the highest quality. This is the benefit of deregulation and oligopoly. NNPC Limited no longer has the monopoly in the petroleum industry; it now has a strong competitor and is being forced to shape up.<\/p>\n<\/p><\/div>\n\n","protected":false},"excerpt":{"rendered":" The cost of fuel in Nigeria has increased by almost 2000% in the last decade. The percentage might be surprising, but that\u2019s our Nigerian reality. The major cause of this steep increase was the removal of fuel subsidies by the government. Despite the government\u2019s rationale and the supposed benefits of the withdrawal of the fuel […]<\/p>\n","protected":false},"author":1,"featured_media":117566,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[95],"tags":[52125,3158,4383,52126,5477],"dealstore":[],"offerexpiration":[],"class_list":["post-117565","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-internet-business","tag-dangote","tag-fuel","tag-lies","tag-nnpc","tag-truth"],"yoast_head":"\nBackground of the players<\/span><\/h2>\n
The Nigeria National Petroleum Commission (NNPC) Limited<\/span><\/h3>\n
Dangote Refinery Limited<\/span><\/h3>\n
Pricing wars<\/span><\/h2>\n
Quality of fuel<\/span><\/h2>\n
Conclusion<\/span><\/h2>\n