Dangote Refinery has recently lowered its ex-depot price of petrol from N950 per litre to N890 per litre. In response, Gillis-Harry believes that NNPCL may also reduce its fuel retail price to stay competitive in the deregulated petrol market. He stated, “There is a clear possibility that NNPC will reduce prices.”
Currently, NNPCL sells petrol at N965 per litre, which suggests that a price cut may be on the horizon. Meanwhile, both Dangote Refinery and petrol distribution partners, such as MRS Filling Stations, have reduced their retail petrol prices to below N940 per litre across the country.
However, marketers are expressing concern that the price reduction by Dangote Refinery negatively impacts their businesses. The Vice President and spokesperson for the Independent Petroleum Marketers Association, Hammed Fashola and Chinedu Ukadike, respectively, have stated that marketers who purchased fuel at the previous price will be forced to sell at a loss due to this new pricing strategy.
Fashola noted, “The immediate negative impact on some petroleum marketers is that they will have to sell at a loss. When this happens, the only option a marketer has is to lower their prices. If they don’t, competition will drive them to do so.” Similarly, Ukadike emphasized, “This is why marketers are hesitant to lift fuel—they fear the price fluctuations will lead to collateral losses.”
Some marketers believe that the price cut by Dangote Refinery is a strategic move made possible by a lower landing cost of imported PMS. Consequently, those who imported fuel at N970 per litre, which is higher than the new ex-depot price of N890, will have to sell at a loss.
Fashola said; “So, if you have a N950 product with you, within two to three days, you will not have an option but to bring it down due to the Dangote Refinery’s petrol price of N890 per litre.
“That is the situation marketers are facing now, but we have to cope with it. It is the marketer who bears the losses.”