The downstream oil sector in Nigeria is witnessing intensified competition as major oil marketers slash prices, challenging the N825 per litre gantry loading cost set by the Dangote Petroleum Refinery.
This move follows revelations by industry players that the landing cost of imported Premium Motor Spirit (PMS) has dropped to N774.72 per litre, reflecting a N50.28 reduction from Dangote’s loading price. The landing cost factors in expenses such as shipping, import duties, and exchange rates, contributing to the overall decline.
Dealers suggest that the ongoing price drop could soon lead to a reduction in pump prices to around N800 per litre, offering some relief to consumers already grappling with high fuel costs.
The situation, according to industry stakeholders, has ignited a price war, with retail marketers now opting to dump the refinery products for imported products on the basis of lower pricing.
Findings by this newspaper also revealed that this decrease in landing cost is expected to influence the price at which petrol is sold to consumers and could increase marketers’ interest in returning to petrol imports.
“Crude oil is a major component in the production of fuel, so a further reduction in its price would definitely warrant a drop in petrol price, and it is possible to drop to N800 per litre,” the National Publicity Secretary of the Independent Marketers Association of Nigeria, Chief Ukadike Chinedu, stated.
Recall that last Monday, NNPC dropped its retail petrol price to N860 and N880 per litre from N945 and N965 in Lagos and Abuja, respectively.
NNPC’s petrol price drop followed Dangote refinery’s retail fuel price reduction to N860 and N880 per litre across its retail partners.
The refinery, in its second price reduction in the new year and the third one in a space of two months, reduced its ex-depot petrol price from N890 to N825 per litre to the delight of Nigerians.
But the reduction by NNPC, the country’s largest fuel supplier, sparked a wave of competitive pricing among private marketers seeking to capture the market share in an environment where consumers are highly sensitive to price fluctuations.
The pain of the price reduction was more significant for petrol importers as they lost an average of N2.5bn daily and N75bn monthly due to the PMS price reduction.
But in a swift business survival strategy, these marketers have now secured fresh products at a cheaper cost that is now detrimental to the operations of the refinery.
According to the latest competency centre daily energy data released by the Major Energies Marketers Association of Nigeria and obtained by our correspondent on Tuesday, the on-spot estimated import parity into tanks has reduced to N774.82 per litre, a reduction of N152.56 or 16.5 per cent from the N927.48 per litre quoted on February 21, 2025 (the last energy data on petrol).
The average cost for 30 days also dropped to N864.92 per litre, while on-the-spot sale at the NPSC terminal was N927.53.
The document also noted that the price of Brent crude was benchmarked at $70.36 per barrel, down from $76.48 per barrel quoted on February 21, with an exchange rate of N1,517.24 per dollar. This price was calculated based on 38,000 metric tonnes by the marketers.
This cost is viewed as an improvement for importers, providing private depot owners and independent marketers with an alternative route to profitability and the opportunity to source cheaper products
Further checks by our correspondent revealed that private depots have effected a price change lower than marketers off taking products from the refinery.
An analysis showed that AA RANO depot has reduced its loading cost to N830 per litre, MENJ Depot now sells at N830, MRS TINCAN sold its products at N830, WOSBAB gave its customers a price estimate of N832, AITEO gave a price of N832 and RAINOIL depot sold its products at N831 per litre.
While marketers that bought two million litres from the Dangote refinery at N825 are selling at N835 per litre, indicating an N1 profit and N4 less than the price offered by private depots.
(Punch)