*Nigerian oil marketers explain apparent factors that may make the current price plunge to result in a further reduction in pump prices of Premium Motor Spirit, also known as petrol, to about N800 per litre for energy consumers in the economy

Isola Moses | 绿帽献妻

Against the backdrop of the ongoing price war between the Nigerian National Petroleum Company Limited (NNPCL) and Dangote Petroleum Refinery, oil marketers have highlighted how the continued price plunge may lead to a reduction in the pump prices of Premium Motor Spirit (PMS), also known as petrol, to about N800 per litre soonest.

绿帽献妻 learnt the price war in the downstream petroleum sector intensified Tuesday, March 11, 2025, as major oil marketers moved to offer a lower price against the gantry loading cost of N825 per litre initially set by Dangote Petroleum Refinery.

The oil marketers also disclosed that the landing cost of imported petrol has dropped to N774.72 per litre, according to report.

Marketers, therefore, projected the continued price plunge might lead to a reduction in the pump price of PMS to about N800 per litre.

The oil dealers further said the N774.72 per litre landing cost, as well as various other expenses, including shipping, import duties, and exchange rates, is a considerable reduction of N50.28 from the N825 per litre the loading gantry cost, which the Dangote聽 Refinery offered recently.

It is recalled the NNPCL recently dropped its retail petrol price to N860 and N880 per litre from N945 and N965 in Lagos and Abuja, respectively.

The petrol price reduction by the state oil company followed Dangote Refinery鈥檚 retail fuel price reduction to N860 and N880 per litre across its major retail partners.

In its second price reduction in the new year and the third one in a space of two months, Dangote Petroleum Refinery again, reduced its ex-depot petrol price from N890 to N825 per litre to the delight of Nigerian consumers.

Unease among fuel marketers over continued PMS price reductions?

Nigerian oil marketers, under the aegis of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) Monday, March 10 had condemned the constant reduction of fuel prices, saying marketers are still counting losses.

Despite deregulation of the downstream petroleum sector of the economy cum market forces at play, PETROAN has advocated the need for a regulation that would make it mandatory that oil prices would only be changed after “six months”.

Joseph Obele, Publicity Secretary of PETROAN in a statement, noted the Association also made a U-turn.

He stated the fuel imports still should be encouraged to put an end to monopoly in the oil sector of the Nigerian economy.

The industry stakeholders as well suggested in view of the price war, retail marketers are now opting to dump the refinery products for imported products on the basis of lower pricing.

However, investigations revealed that this decrease in landing cost is expected to influence the price at which petrol is sold to energy consumers, and could increase marketers鈥� interest in returning to petrol imports.

Speaking on the development, Chief Ukadike Chinedu, National Publicity Secretary of the Independent Marketers Association of Nigeria (IPMAN), reportedly said: 鈥淐rude 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.”

stated.

Coping with competitive pricing regime

However, as the West African country鈥檚 largest fuel supplier, the NNPCL recent fuel retail price reduction, has 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, report stated.

Likewise, the pain of the price reduction was more significant for petrol importers, as they lost an average of N2.5 billion daily and N75 billion monthly due to the PMS price reduction in the domestic market.

Still, in a swift business survival strategy, the oil marketers have now secured fresh products at a cheaper cost that is now detrimental to the operations of the refinery, The Punch report said.

The latest competency centre daily energy data released by the Major Energies Marketers Association of Nigeria Tuesday聽 also indicated the on-spot estimated import parity into tanks had reduced to N774.82 per litre, a reduction of N152.56 or 16.5 percent 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 further showed 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 US 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

Checks further revealed that private depots have effected a price change lower than marketers off taking products from the local 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.

In regard to the latest development, Olatide Jeremiah, an oil and gas expert,聽 forecasted the current situation is likely to compel the private oil refinery to lower its ex-gantry price to attract more customers.

Jeremiah, who is the Chief Executive Officer of petroleumprice.ng, emphasised that, due to ongoing price fluctuations, marketers are increasingly choosing to source products from private depots, where they can expect greater price stability.

This shift in preference is because the refinery has implemented two price reductions this year.

Giving a detailed explanation of the situation, he stated, 鈥淟ast week, prices particularly for petrol and diesel started dropping, and last Thursday, it went below Dangote鈥檚 ex-depot price.

The refinery price is N825 per litre and marketers will pay N9 for NMDPRA fees and other levies making a total of N834 per liter.

Jeremiah further explained: “The marketers that bought from Dangote and still have old stock are seeking at zero profit. So most of the marketers stopped buying.

“Many depots also started selling N830, even MRS, that get products from Dangote, while marketers at the Dangote refinery sold between N835 or N834 today to finish their stock.”

He stated: “Other private depots are selling at N830 or N831 per liter.

“The reason is that private depots got a cheaper product even less than Dangote coastal price of N780.

But the landing cost is less than that amount.

“Another scenario is the MRS and Ardova got their product at the coastal price which will enable them to sell at N834.”

The industry expert said: 鈥淭he expense to the truck from Dangote Refinery is between N40 and N45, so it is not a good deal.

“I can tell you at the Dangote depot today, the place was deserted, marketers trading there have now switched to private depots.

“This is likely to force Dangote to reduce its price.”

He added: 鈥淩umours are already spreading because private depots are now making good sales.

“The back and forth of prices has made marketers uncomfortable.

“They are counting their loss and that is why they now patronise private depots where there is a bit of stability.鈥�

Kindly Share This Story