Oil Marketers
Olamilekan Abayomi
Fuel prices in Nigeria are expected to drop nationwide as the cost of imported petrol has fallen below the Dangote Refinery’s gantry price. According to the Major Energies Marketers Association of Nigeria, imported petrol is currently N77 per liter cheaper than Dangote Refinery’s price of N799 per liter. This development has prompted some filling stations in Lagos to reduce their prices to as low as N817 per liter, compared to the Dangote Refinery-backed MRS filling station price of N839 per liter.
The President of the Independent Petroleum Marketers Association of Nigeria, Abubakar Maigandi, attributes the potential price drop to increased competition in the market. He notes that about 80% of marketers source petrol directly from Dangote.
Dangote Refinery had increased its gantry price to N799 per liter in January, leading to an upward spike in retail petrol prices nationwide. However, with imported petrol now cheaper, marketers are likely to opt for imports, which could drive prices down further.
Logistics costs remain a major factor influencing price parity across the country. Maigandi explains that bulk discounts apply, with purchases over 2 million liters receiving a N20 per liter reduction and those over 5 million liters getting a N25 discount off the N799 base price.
The Nigerian government had previously stated that Dangote Refinery’s price increase was expected to stabilize the market. However, with imported petrol now cheaper, consumers may soon enjoy lower fuel prices.
Dangote Refinery’s Managing Director, David Bird, had insisted that the refinery’s fixed petrol price was competitive. The refinery has been supplying petrol at around N739 per liter through MRS filling stations nationwide.
The development has presented a fresh dilemma for petrol marketers, who now have to decide between sourcing from Dangote Refinery or importing cheaper petrol.
As crude oil prices trade at $64.36 per barrel for West Texas Intermediate and $69.15 per barrel for Brent Crude, the cost of imported petrol is likely to remain competitive.
With increased competition and cheaper imports, Nigerians may soon enjoy relief at the pumps.
The success of this development depends on effective implementation and collaboration between regulators, marketers, and refineries.
