The Nigerian National Petroleum Company Limited has reduced its petrol pump price to 835 naira per litre. This marks the third time the state-owned company has lowered prices in December 2025. The new price represents a drop of 80 naira from the previous rate of 915 naira per litre.
The change was observed at NNPCL filling stations in Abuja and Lagos on Thursday. Checks at key retail locations confirmed the new pricing. In Lagos, specific NNPCL stations in Igando, Lekki, and Iwaya were selling fuel for between 838 and 840 naira per litre. This price adjustment follows similar moves by other major fuel marketers in the country.
Market Competition Drives Price Cuts
Industry analysts link the price reduction to intense competition in Nigeria's downstream petroleum sector. This competition is being driven by new domestic refining capacity and lower wholesale costs. Prior to NNPCL's move, independent marketers had already reviewed their prices downwards.
Major marketers including MRS, BOVAS, and AA Rano reduced their pump prices across the Federal Capital Territory. Their prices now range from 739 to 865 naira per litre, depending on the location. This created pressure on the national oil company to adjust its own pricing to remain competitive.
The shift is largely attributed to increased activity from the Dangote Refinery and private depot owners. They recently reduced the ex-depot price of petrol. Ex-depot price is the cost at which products are sold from storage depots to retailers. These prices now fall between 699 and 800 naira per litre. This lower wholesale cost has allowed retailers to reduce pump prices while maintaining margins.
A Pattern of Decreasing Prices
This week's cut is part of a sustained trend for the month. NNPCL had previously reduced fuel prices on December 4 and December 10, 2025. The consecutive cuts represent a significant shift in market behavior. December is typically associated with fuel scarcity and price spikes in Nigeria, not reductions.
The series of adjustments signals a move toward more market-responsive pricing. For years, Nigeria's fuel market was dominated by imported products. This led to prices heavily influenced by global crude costs and foreign exchange rates. The entry of large-scale local refiners is changing that dynamic.
Domestic refining reduces costs associated with importing fuel. These costs include international freight, insurance, and port charges. By sourcing more fuel locally, marketers face less foreign exchange exposure. This provides more stability and room for price reductions when crude oil costs permit.
The changing fuel price landscape occurs alongside ongoing reforms of Nigeria's oil sector. In May 2023, President Bola Tinubu announced the removal of the longstanding petrol subsidy. The policy was projected to save the government billions of dollars annually. These funds were meant to be redirected to critical infrastructure and social programs.
However, the management of proceeds from the subsidy removal has faced scrutiny. In a May 2025 report, the World Bank noted that gains were not being fully transferred to national accounts. The global institution stated that the subsidy was fully removed by October 2024.
Despite this, NNPCL did not begin transferring the revenue gains to the Federation Account until January 2025. Since then, the company has been remitting only 50 percent of these gains. An NNPCL insider, who asked not to be named, explained the situation. They stated the other half is being used to offset "past arrears" and commitments from production sharing contracts.
The World Bank has urged the government to increase transparency of oil revenues. It emphasized that full remittance of fiscal savings is critical for sound economic management.
For Nigerian consumers, the lower pump price offers immediate relief. The reduction comes during the peak festive travel season. Lower transport costs could potentially ease the prices of goods and services. However, economists caution that broad inflation may not immediately follow the fuel price drop.
Public reaction to the price cut has been mixed. Some social media users compared NNPCL's new price unfavorably to lower rates at some independent stations. Others viewed the reduction as a positive market development driven by competition.
Energy experts describe NNPCL's move as a strategic alignment with market costs. It is not seen as a policy-driven intervention. The company appears to be responding to competitive signals to retain its market share.
Market observers agree that fuel prices will remain fluid. Future costs will depend on several factors. These include global crude oil prices, the stability of the Nigerian exchange rate, and the consistent output of domestic refineries.
The current situation demonstrates a fundamental shift. Pricing power is moving away from a single dominant supplier. The market is now influenced by multiple players and more transparent cost structures. Sustaining this competitive environment will require continued open market access. Regulators must ensure no single operator can dominate the supply chain.
For a nation long accustomed to frequent price hikes, consecutive reductions are a notable change. The coming weeks will test whether this trend holds. Much depends on the continued operational stability of local refineries and steady crude supply.