Nigerian motorists and businesses are witnessing a welcome decline in fuel costs as intense competition among depot operators forces wholesale petrol prices downward. This market shift, recorded in the third week of January 2026, is bringing fresh relief and raising hopes for cheaper pump prices in the near future.
Widespread Price Reductions Across Key Cities
Industry data reveals that owners of energy depots have significantly reduced their wholesale rates for Premium Motor Spirit (PMS), commonly known as petrol. The average price across major depots in cities like Lagos and Calabar now stands at approximately ₦702 per litre. This adjustment is not isolated but reflects a broad reset along coastal supply corridors, indicating a nationwide trend.
The price movements between Monday, January 12, and Friday, January 16, 2026, were primarily driven by domestic market dynamics. Analysts point to intensifying competition among depot owners, improved product availability, and strategic repricing as the core factors, rather than fluctuations in the global crude oil market.
Market Forces Driving the Downward Trend
With more petroleum products available and chasing a cautious pool of buyers, depot operators have been compelled to revise prices to maintain their loading volumes. Marketers have adopted a wait-and-see approach, delaying large purchases in anticipation of further drops, which in turn pressured depot owners to act quickly.
Fundamental supply conditions remain favourable. Improved evacuation from coastal depots, steady inflows linked to private refinery volumes, and smooth logistics have all contributed to keeping wholesale prices moderately low. Repeated price reviews by key operators in Lagos helped reset market expectations, forcing competitors to follow suit to avoid losing their share.
This pattern underscores a more competitive downstream sector where pricing power is increasingly determined by supply chain efficiency and speed, rather than market coordination.
Mixed Signals and Future Outlook for Consumers
Despite the overall decline, the Lagos market showed mixed signals. While some operators like Pinnacle anchored the lower price range, others like Shellplux and Nipco implemented slight upward reviews, mainly due to inventory replacement costs. However, overall market sentiment stays cautious, supported by ample product availability.
For the average Nigerian, sustained wholesale price cuts typically filter down to retail stations over time. If the current competitive pressures and strong supply conditions persist, consumers in major cities can expect further easing of pump prices in the coming weeks. The market is now in a clear price-watch phase, with operators prioritising sales volume over profit margins.
This development occurs alongside clarifications from the Dangote Petroleum Refinery, which confirmed it did not shut down its petrol unit. The refinery reported delivering a massive 43.3 million litres of PMS to the market in a single day (Saturday, January 3), enough to meet over half of Nigeria's estimated daily consumption, further bolstering supply.
