Emmanuel OchayiThe fuel price war in Nigeria’s downstream oil sector has taken a new turn as the landing cost of premium motor spirit (PMS) has dropped to N774.82 per litre. This is lower than the ex-depot price of Dangote Refinery, which stands at N825 per litre. The price reduction has put pressure on local refiners and may lead to a further drop in petrol pump prices.
Lower Landing Cost Pushes Marketers to Imports
Oil marketers are now shifting their focus to imported fuel, which comes at a cheaper rate. The N774.82 per litre landing cost factors in shipping, import duties, and exchange rates. It is N50.28 lower than Dangote’s loading cost, making imported fuel more attractive to marketers.
Join our WhatsApp ChannelChief Ukadike Chinedu, the National Publicity Secretary of the Independent Marketers Association of Nigeria, confirmed the trend. “If crude oil prices drop further, fuel price could fall to N800 per litre,” he said.
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Impact on Fuel Price at Retail Stations
The reduction in landing cost is expected to reflect at retail stations soon. Just last week, the Nigerian National Petroleum Company (NNPC) adjusted its petrol price from N945–N965 per litre to N860–N880 per litre. This move was in response to Dangote Refinery’s price cut from N890 to N825 per litre.
Private depots have also slashed prices to stay competitive. AA RANO, MENJ, and MRS TINCAN now sell at N830 per litre, while WOSBAB and AITEO offer their fuel at N832 per litre. RAINOIL has pegged its price at N831 per litre. Meanwhile, some marketers who bought from Dangote Refinery at N825 per litre are now selling at N835 per litre, making just a N1 profit.
Losses for Importers and Calls for Price Regulation
While consumers welcome the drop in fuel price, importers are facing heavy losses. Fuel traders are losing an estimated N2.5 billion daily and N75 billion monthly due to the recent price reductions.
In response, the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) has expressed concerns over the frequent price changes. The association has called for a regulation that ensures price adjustments only happen every six months.
Crude Oil Price and Exchange Rate Influence
The drop in fuel price is linked to changes in crude oil price and exchange rates. Brent crude is now priced at $70.36 per barrel, down from $76.48 per barrel in February. Additionally, the exchange rate stands at N1,517.24 per dollar, affecting the cost of imported fuel.
With private depots offering lower rates than Dangote Refinery, more marketers may return to imports, further intensifying the fuel price war.
What Next for Fuel Price in Nigeria?
As competition heats up, fuel price fluctuations are expected to continue. While marketers aim to stay profitable, consumers hope for more reductions. If crude oil prices and exchange rates remain stable, the price of petrol at retail stations may settle at around N800 per litre in the coming weeks.
For now, the battle for market dominance between local refiners and fuel importers continues, with Nigerians watching closely to see where fuel price will go next.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
