The Dangote Petroleum Refinery has lowered its petrol loading cost from N825 per litre to N815 per litre in a fresh move to compete in Nigeria’s oil market. The price adjustment, which took effect on Thursday, has drawn significant interest from oil marketers, prompting many to bypass private depots in favor of sourcing directly from the refinery.
Oil marketers have responded positively to the price drop, as they now have an incentive to purchase fuel directly from Dangote’s 650,000 barrels-per-day refinery. A marketer, who wished to remain anonymous, confirmed the new pricing.
“It is true, I sighted the PFI (pro forma invoice), N815 ex-depot, N825 including the N10 charge by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA). Marketers are selling between N826 and N830 per litre,” the marketer said.
The reduction is expected to trigger a reaction from private fuel depots, which may also lower their prices to remain competitive. In response to Dangote’s price cut, some private depots have already adjusted their rates.
Private Depots Adjust Prices to Compete
Investigations revealed that while some depots maintained their prices, others have reduced costs to match Dangote’s offer. The current loading prices at various depots are as follows:
- AA RANO Depot – N830 per litre
- MENJ Depot – N830 per litre
- Bovas Depot – N826 per litre
- WOSBAB Depot – N831 per litre
- AITEO Depot – N827 per litre (down from N832)
- Integrated Depot – N826 per litre
- RAIN OIL Depot – N831 per litre
Price War Intensifies Amid Falling Import Costs
The reduction comes amid falling import costs for petrol. On Tuesday, reports showed that the landing cost of imported petrol in Nigeria dropped to N774.72 per litre. Marketers predicted that this decline could lead to a decrease in pump prices, possibly bringing petrol to around N800 per litre.
Chief Ukadike Chinedu, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), explained the situation.
“Crude oil is a major component in the production of fuel. If crude oil prices drop further, petrol prices will also reduce. It is possible for the pump price to fall to around N800 per litre,” he stated.
However, the latest update indicates that the landing cost has risen slightly to N803.35 per litre, though it remains lower than Dangote’s current ex-depot price.
Also Read:
- Petrol Prices May Drop Below N800 as Competition Heats Up in Nigeria’s Oil Market
- Marketers Oppose Fuel Price Cuts, Call for Imports and Market Stability
Dangote Refinery Responds to Market Forces
Industry analysts believe Dangote Refinery’s price reduction is a strategic move to retain its market share. With millions of litres of petrol available, the refinery is adjusting to competitive pressures.
“Yes, there is speculation that the price of imported products is now lower. That is the reason for the price war. It is the beauty of deregulation. Dangote has millions of litres and would not want any external force to take its market share,” Ukadike noted.
When contacted, an official from Dangote Refinery, who requested anonymity, neither confirmed nor denied the price change.
“We currently don’t have any information about that, but we will try to clarify tomorrow. You can report what marketers told you, but we don’t have any information on that as I talk to you,” the official stated.
As competition intensifies, industry watchers expect more adjustments in fuel prices. If import costs continue to decline, private depots and Dangote Refinery may be forced to lower prices further. Consumers are hopeful that the ongoing price war will lead to a significant drop in pump prices in the coming weeks.