The price war in the downstream oil sector continued on Thursday as the Dangote Petroleum Refinery quietly implemented a price reduction at its loading gantry, reducing the loading cost of its petrol from N825 per litre to N815 per litre.
It was gathered that the new pricing structure introduced on Thursday was met with enthusiasm by oil marketers, who, as a result, opted to bypass private depot owners and begin sourcing their products directly from the refinery.
This N10 price reduction is also anticipated to prompt a competitive reaction from private fuel depots, which may adjust their prices downward to maintain their market position.
Recall that on Tuesday, The PUNCH exclusively reported that the landing cost of petrol imported into Nigeria dropped to N774.72 per litre, with marketers predicting that the continued price plunge may lead to a reduction in the pump prices of PMS to about N800 per litre.
Dealers said the N774.72 per litre landing cost, which factors in various expenses, including shipping, import duties, and exchange rates, was a considerable reduction of N50.28 from the previous N825 per litre offered at the loading gantry of the Dangote Petroleum Refinery.
The situation, according to industry stakeholders, ignited a price war, with retail marketers opting to dump the refinery products for imported products on the basis of lower pricing.
“Crude 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,” the National Publicity Secretary of the Independent Marketers Association of Nigeria, Chief Ukadike Chinedu, stated.
But in a fresh effort to control market share, the 650,000 barrels per day capacity refinery reduced its loading cost to N815 per litre on Thursday.
When added to the N10 levy charged by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, this will increase the cost to N825 per litre.
Consequently, private depot owners in Lagos have also reduced their loading costs to N825 per litre from N830 sold earlier this week
A marketer who preferred not to be named due to lack of authorisation to speak to the media, said, “It is true, I sighted the PFI, N815 ex-depot, N825 including NMDPRA N10. Marketers are selling N826– N830.”
Another marketer confirmed the price drop, saying it was influenced by market forces. Efforts to obtain a pro forma invoice issued to marketers by our correspondent were unsuccessful, as the refinery recalled all invoices due to an error on the initially released invoice.
Further checks by our correspondent revealed that private depots have effected a price change to match the price offered by the refinery.
An analysis showed that AA RANO depot left its loading cost price unchanged at N830 per litre. MENJ Depot also left its own at N830. Bovas depot sold its products at N826, WOSBAB gave its customers a price estimate of N831, while AITEO gave a price of N827 from N832 charged earlier this week. Integrated depot sold at N826 and RAINOIL depot sold its products at N831 per litre.
Commenting, the IPMAN National Publicity Secretary, Chinedu Ukadike, said, “Yes, there is speculation that the price of imported products is now lower. That is the reason for the price war. It is the beauty of deregulation. Dangote has millions of litres and would not want any external force to take its market share. So it would have forced the price reduction.”
Meanwhile, the landing cost of petrol has increased to N803.35 per litre from N774.82 per litre. This is still cheaper than the ex-depot price of Dangote Refinery’s petrol, according to the Major Energies Marketers Association of Nigeria.
When contacted, an official of the Dangote Refinery, who asked not to be quoted, claimed not to be aware of the new price change but asked our correspondent to go ahead with what oil marketers said.
“We currently don’t have any information about that, but we will try to clarify tomorrow. You can report what marketers told you, but we don’t have any information on that as I talk to you.”
