The battle for control of Nigeria’s petroleum market has intensified, with major oil marketers lowering prices in response to the dropping cost of imported fuel. Industry experts predict that the pump price of Premium Motor Spirit (PMS), also known as petrol, could soon fall to about N800 per litre as importers secure cheaper supplies.
The latest market shake-up follows a report that the landing cost of imported petrol has dropped to N774.72 per litre, a significant reduction from the N825 per litre offered at the Dangote Petroleum Refinery. This difference in price has forced retail marketers to reconsider their sourcing strategies, shifting their focus from locally refined products to cheaper imported fuel.
Price War Intensifies as Marketers Abandon Dangote’s Fuel
Over the past few weeks, oil marketers have scrambled to undercut competitors, offering lower pump prices to attract customers. This shift has been fueled by the realization that imported petrol is becoming significantly cheaper than locally refined fuel.
Industry sources revealed that private depots have slashed their loading prices below Dangote’s refinery rates, prompting many marketers to abandon the refinery’s products. A price review showed that:
- AA RANO depot reduced its petrol price to N830 per litre
- MENJ Depot and MRS TINCAN both sold at N830 per litre
- WOSBAB and AITEO offered fuel at N832 per litre
- RAINOIL depot priced its product at N831 per litre
This means that marketers who previously bought petrol from the Dangote refinery at N825 per litre and sold it at N835 per litre are now struggling to compete with private depots, which are offering even lower prices.
Marketers Demand Stability as Prices Fluctuate
The National Publicity Secretary of the Independent Marketers Association of Nigeria (IPMAN), Chief Ukadike Chinedu, said the price drop was expected due to fluctuations in the global crude oil market.
“Crude oil is a major component in fuel production, so when its price drops, petrol prices will also fall. It is possible that pump prices may soon drop to N800 per litre,” Chinedu stated.
This situation has put immense pressure on Dangote’s refinery, which has already reduced its ex-depot price twice this year—from N890 to N825 per litre. However, experts believe that further reductions might be necessary for the refinery to remain competitive.
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Industry Experts Predict Further Price Reductions
Petroleum analyst Olatide Jeremiah, CEO of PetroleumPrice.ng, explained that marketers have shifted their preference to private depots because of more stable pricing.
“Last week, fuel prices started dropping, and on Thursday, they went below Dangote’s ex-depot price. The refinery’s price is N825 per litre, but when you add NMDPRA fees and levies, the total cost becomes N834 per litre,” Jeremiah explained.
He also revealed that many marketers who previously bought from Dangote are now selling at zero profit just to clear their old stock.
He added: “At Dangote’s depot today, the place was deserted. Many marketers have switched to private depots. This is likely to force Dangote to reduce its prices further. There are already rumors of another price cut because private depots are making huge sales.”
Marketers Struggle with Losses, Demand Price Regulation
While consumers may welcome the falling fuel prices, marketers are concerned about their profit margins. The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) condemned the constant price fluctuations, warning that many marketers are counting losses.
In a statement, PETROAN Publicity Secretary Joseph Obele said, “Despite deregulation, we need a system where prices are only changed every six months. Right now, the market is too unstable, and many marketers are struggling.”
The association also reversed its stance on fuel imports, stating that competition should be encouraged to prevent a monopoly in the downstream sector.
The Future of Petrol Prices in Nigeria
With the exchange rate fluctuating and the Brent crude oil price dropping to $70.36 per barrel, industry experts predict that petrol prices may continue to fall.
While the competition among marketers is expected to benefit consumers, questions remain about the long-term stability of the sector. If Dangote Refinery continues to lose market share to importers, the government may have to intervene to ensure a balance between affordability and profitability.