Today, Monday, numerous private depots in Nigeria, especially in Lagos, were notably empty as the Dangote Refinery began distributing petrol on a large scale to retail outlets across 12 Nigerian states.
Marketers and retailers, who have traditionally relied on private depot supply chains, have now rerouted their trucks to Dangote’s facilities due to the significant price benefits they offer, which are hard to overlook.
At the refinery’s loading area, petrol was priced at ₦820 per litre, which is a noticeable deviation from the existing depot prices in Lagos. On Friday, WOSBAB and AITEO set their prices at ₦836, while MENJ was at ₦838. Although the price difference might seem slight on paper, it becomes quite significant when considered over thousands of litres, potentially influencing the commitment of marketers.
The effect was instantaneous: truck traffic was cleared from depots in key locations. Industry experts refer to this change as a textbook example of market displacement, where Dangote utilized its refining capability to influence ex-depot dynamics.
In the Dockyard area, there was no truck activity at AITEO and NIPCO depots. Along the Satellite Town route, operations at MENJ, First Royal, and Rainoil were at a standstill. Similarly, in the Coconut area, there was an absence of activity at Sahara, Bono, and Integrated as there was no truck movement to be seen.
The trend was not limited to Lagos; reports from Calabar and Port Harcourt revealed empty depots as well, highlighting the refinery’s national influence and its capacity to swiftly shift demand.
Operators widely agree that Dangote’s approach to pricing and the scale of its throughput pose a significant challenge to the profit margins of traditional depots. With demand increasingly centered on one key player, private depots face becoming obsolete unless they find ways to innovate or reorganize.
Analysts caution that continuous price undercutting might hasten the realignment of supply chains, pushing depot owners to either form strategic alliances or leave the market entirely. For consumers, on the other hand, this transition presents the possibility of reduced fuel prices and more stable supply availability.
