Amidst stiff competition in Nigeria’s downstream oil sector, several oil marketers have begun removing the Nigerian National Petroleum Company Limited (NNPCL) logo from their filling stations, opting to terminate franchise agreements with the national oil firm. This move comes in response to the recent crash in refined product prices triggered by the $20 billion Dangote Petroleum Refinery, which has significantly reduced loading costs of Premium Motor Spirit (PMS), making it more attractive for independent marketers to source fuel independently.

Findings by https://punchng.com/,  revealed that some NNPCL-branded stations along the Lagos-Ibadan Expressway, including Wawa and Ibafo, have already dropped the national oil company’s identity and are rebranding under private ownership. Industry experts predict that more filling stations in Lagos and surrounding states will follow suit as marketers seek lower-cost supplies from the Dangote Refinery and other private importers.

According to Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), the departure from NNPCL’s franchise model is driven by economic factors and the evolving market landscape. The recent price cut by Dangote Petroleum Refinery, which slashed its loading cost from ₦950 to ₦890 per litre, has intensified competition among marketers, further incentivizing them to abandon NNPCL’s supply chain.

Ukadike explained, “yes, that observation is correct. Some marketers are changing and rebranding. Remember that there was a time NNPCL was the sole distributor and importer of petrol. So, marketers then gave their filling stations as franchises so that they could get products. But now that the game has changed, you can even see some marketers now changing to MRS filling stations because MRS is now selling cheaper than any other station.”

He added that marketers are prioritizing profitability and return on investment, stating, “if you are carrying Total as a brand name and Total is not giving you petrol products, what is the sense of carrying the name? You have to remove it and get a better alternative.”

Olatide Jeremiah, an oil and gas expert and CEO of petroleumprice.ng, confirmed that marketers initially used franchise licenses as a method to secure cheaper products from NNPCL, which was still importing fuel at the time. However, the emergence of the Dangote Refinery disrupted this arrangement, as the national oil firm failed to secure an agreement to fix petrol prices with the Lekki-based plant.

Jeremiah noted, “after the removal of subsidy and petrol price went up, NNPCL was asked to manage the price and prevent it from skyrocketing. NNPCL and the majors were pegging the price at ₦500, but the landing cost was above that amount. This affected importers and independent marketers who imported fuel. For instance, Petrocam imported and claimed that its landing cost was ₦700, but the majors and NNPCL were selling at ₦500 per litre. That is a difference of ₦200 and was a huge loss.”

He further explained that marketers paid millions to obtain NNPCL franchise licenses to access cheaper fuel from NNPCL depots. However, with Dangote Refinery offering better prices and selling directly to marketers, the franchise model lost its appeal.

Akinola Ogunyolemi, Chairman of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) in Lagos State, clarified that most of the outlets rebranding were not originally owned by NNPCL.

“These are individual outlets. What they do is that, if an NNPCL contract expires and they are not ready to move forward with them or if they get a juicy offer, they will remove the NNPCL logo. They will rebrand again and put other people’s names. That could be the reason,” he stated.

Ogunyolemi emphasized that the removal of the NNPCL symbol could signify the end of an agreement or a breach of contract by either party.

“Most of the outlets are not NNPCL-owned. You can have your filling station built and put NNPCL there, with your contract to them. Maybe they could not meet up with your agreement with them, (because they too also have some breach of contract sometimes), you might decide to go and give the station to Mobil or Total. It is yours.”

The shift away from NNPCL branding highlights the growing influence of private refineries like Dangote in Nigeria’s downstream oil sector. As marketers prioritize cost efficiency and profitability, the national oil company faces increasing competition and the need to adapt to the evolving market dynamics.