Marketers Expect Fresh Drop in Petrol Prices Across Nigeria
- Marketers say another petrol price drop is likely in the coming days as global crude oil prices continue to decline
- IPMAN links recent fuel price changes to falling depot rates and the Dangote Refinery's new prices
- Chinedu Ukadike, the Public Relations Officer of IPMAN, in an exclusive chat with Legit.ng offers hope for price relief
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has said petrol prices in the country are likely to drop further in the days and weeks ahead as a result of the recent dip in international crude oil prices.
Chinedu Ukadike, the Public Relations Officer of IPMAN, told Legit.ng during an interview that the drop in crude oil prices is already being reflected at the pump at the Dangote Refinery and depots.
Source: Getty Images
He explained that the price of crude oil is directly tied to local petrol prices.
Ukadike said:
“When there is a reduction in the international market, there will be a drop in petrol price. Domestic reduction is equivalent to the price of crude oil in the market."
He added that once a new supply is lifted at lower landing costs, Nigerians should expect another downward adjustment in pump prices.
He noted that marketers factor in the gantry price of petrol, logistics costs, and other operational expenses before setting pump prices.
Ukadike told Legit.ng:
“Whatever is sold at the gantry price, we calculate our logistics. Next week or within the next two weeks, petrol price will fall further."
The IPMAN official said many filling stations are yet to reduce prices below N1,300 per litre because they are still managing old stock purchased at higher rates.
He explained that immediate price cuts could lead to losses for marketers still holding expensive inventory.
He said:
“This announcement is enabling people who have old stocks to clear out their stocks, not only clearing out their stocks but also enabling them to prepare to take the fresh stocks."
Source: Getty Images
Ukadike added that loading activities usually slow down whenever the Dangote Refinery announces a new price, allowing marketers time to adjust their stock before fresh supplies enter the market.
He said:
“Once the Dangote refinery announces a new price, there is a serious pause in loading. It will enable people who just bought new products to see how they can clear the old stocks within a window of a day or two."
He said once new products enter circulation, pricing adjustments will naturally follow.
Ukadike added:
“Then, when the new stocks start coming into the market, the process of supply and price will set in."
"Some marketers have already reduced petrol prices to around N1,200 per litre, with fuel selling between N1,220 and N1,250 per litre in parts of Lagos, including Apapa and Lekki."
Petrol price expectations
He added that petrol prices in northern Nigeria are expected to remain higher, ranging between N1,270 and N1,350 per litre, due to transportation and logistics costs.
While in Lagos and Warri, it is expected to drop further.
IPMAN PRO, however, stressed that further declines in petrol prices will depend on continued stability in crude oil prices and easing global geopolitical tensions.
Ukadike identified the cost of funds as another key factor affecting petrol pump prices, noting that financing expenses influence how quickly marketers adjust prices.
"Marketers aside, logistics also consider the interest rate on the loans from banks to determine fuel prices."
Dangote Refinery announces new diesel, jet fuel prices
Earlier, Legit.ng reported that Dangote Refinery has reduced the price of Automotive Gas Oil (diesel) at the gantry by N100 to N1,600, providing much-needed hope for a drop in transport, logistics, and manufacturing costs in Nigeria.
Analysts said the cut is expected to fuel a new wave of price competition in the downstream market in Nigeria, with depot prices having been high recently.
In recent days, diesel has sold for between N1,660 and N1,670 across major Lagos depots, namely African Terminal, Sahara, Ibeto, and Duport.
Source: Legit.ng
