Some filling stations in Nigeria continue to sell petrol at over N1,000 per litre, even after recent price cuts by Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPC). Marketers explain that this is because they are still clearing out old stock purchased at higher prices.
Speaking on the issue, the National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, said many marketers are holding on to old stocks they bought at N970 per litre. “You cannot just start selling at the new price immediately,” Fashola explained. “Once marketers finish selling their old stock, they will adjust to the new prices. By next week, you will see more stations selling at reduced rates.”
Fashola added that competition in the market will naturally push marketers to lower their prices. “This is competition,” he stated. “If you like, put your fuel at N1,500, nobody will buy it. So, if you see stations still selling above N1,000, it’s because they haven’t cleared their old stock.”
Price Reductions Spark Adjustments
On December 19, 2024, Dangote Refinery reduced its ex-depot price from N970 to N899.50 per litre. This was followed by an announcement of a partnership with MRS Petrol stations to sell petrol nationwide at N935 per litre. The move triggered a “price war” in the downstream sector, with the NNPC also cutting its ex-depot price to N899 per litre.
Many major marketers responded by adjusting their pump prices to sell petrol below N1,000 per litre. For instance, NNPC retail outlets in Lagos now sell petrol at N925 per litre, while others sell at N990, N980, or N935 per litre. However, in some areas, including Lagos and Ogun states, petrol prices remain as high as N1,070 per litre at certain filling stations.
Fashola noted that some marketers are already selling at lower prices despite incurring losses. “When stock levels get to a point where losses are bearable, marketers reduce prices,” he explained. “For example, at some of my stations, we calculated the losses and found them minimal, so we lowered our prices even though it was old stock.”
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Challenges of Deregulation
While acknowledging the benefits of deregulation, Fashola also highlighted its challenges. “The negative aspect of deregulation is the unpredictability of prices. If you buy at N1,000 today and the price drops to N950 tomorrow, you’ve already recorded a loss,” he said. He urged marketers to stay informed and cautious when purchasing stock to avoid financial losses.
The removal of fuel subsidies has further strained the operations of petroleum marketers. Fashola revealed that the rising cost of PMS—from N200 to over N1,000 per litre—has made business more challenging. “We need more money to stay in business, but the margins are now slimmer,” he said. He also pointed to high bank interest rates as an additional burden on marketers.
Joseph Obele, National Publicity Secretary of the Petroleum Products Retail Outlet Owners Association of Nigeria, added that no member of the association has purchased petrol at the reduced rate yet. He noted a price disparity between Lagos and other cities, such as Port Harcourt, where logistics costs push prices higher. “NNPC sells petrol at N899 in Lagos but at N970 in Port Harcourt,” Obele said.
Marketers Call for Patience
Fashola assured consumers that prices will stabilize as marketers clear their old stock and adjust to new market realities. He also urged his colleagues to prepare for the challenges of operating in a deregulated market. “We cannot continue doing business the way we used to,” he said.
While the price reductions have sparked some changes, Nigerians may need to wait a little longer before seeing uniformity in petrol prices across the country.