Imported Fuel Marketers Face Losses as Dangote Refinery Cuts Petrol Price, NNPC May Follow Suit

The Nigerian National Petroleum Company Limited (NNPCL) may lower the price of premium motor spirit (PMS) in response to Dangote Refinery’s recent ex-depot price reduction. This development has sparked concerns among petroleum marketers who imported fuel at higher costs, as they now risk significant financial losses.

Dangote Refinery recently reduced its ex-depot price of petrol from N950 to N890 per litre. This move is already impacting the market, with some major fuel distribution partners, including MRS filling stations, selling below N940 per litre nationwide. In response, industry experts believe that NNPCL, which currently sells petrol at N965 per litre, might also cut its price to remain competitive in the deregulated market.

Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), stated that there is a strong possibility of NNPCL adjusting its prices downward. He noted that the state-owned oil firm would likely take this step to stay relevant in the evolving fuel pricing landscape.

However, the price reduction by Dangote Refinery is causing distress among fuel marketers who had previously purchased imported petrol at higher rates. Hammed Fashola, Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), and Chinedu Ukadike, the association’s spokesperson, expressed concerns that many marketers will be forced to sell at a loss.

Fashola explained that market competition leaves importers with no choice but to lower their prices. He highlighted the risk faced by marketers who bought fuel at N970 per litre, as they must now adjust their prices downward to remain competitive with Dangote Refinery’s new ex-depot price of N890 per litre.

Ukadike pointed out that this situation discourages marketers from lifting fuel due to the uncertainty surrounding price fluctuations. He emphasized that no marketer wants to suffer significant financial losses due to unpredictable price drops.

Industry sources suggest that Dangote Refinery’s price cut is a strategic move to counter the lower landing cost of imported PMS. As a result, marketers who had purchased petrol at N950 or higher will have to quickly reduce their prices to stay competitive.

Despite the challenges, PETROAN has confirmed that fuel and other petroleum products are now being lifted from the Port Harcourt and Warri refineries.