Marketers in Panic Mode as Petrol Prices Changes amid Fall in Crude Oil Cost
- Petroleum product marketers have expressed pessimism about the continued lifting of petroleum products to filling stations
- The marketers say that each there is a crash in petrol prices, marketers lose huge sums and run into debts
- The national publicity secretary of IPMAN, Chinedu Ukadike said marketers are scared to lift petrol from the depots
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Amid the fall in the global price of crude oil prices, independent marketers have expressed mixed feelings about lifting petrol from depots.
Petroleum product marketers have expressed fears that the volatility in petrol prices may lead to unstable PMS supply in filling stations.
The marketers said that despite the absence of fuel scarcity due to increased local refining, filling station operators are reluctant to lift products from depots.
Source: UGC
IPMAN members lose money due to price crash
The national publicity secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, stressed that marketers lose billions of naira each time petroleum product prices crash.
He disclosed that the mega Dangote Refinery began petroleum product refining in early 2024, leading to a crash in diesel prices and forcing marketers to sell below their purchase cost, thereby running into huge losses and debts.
Meanwhile, due to the deregulation of the downstream petroleum sector, the 650,000 bpd-capacity refinery and the Nigerian National Petroleum Company Limited (NNPC) have changed PMS prices multiple times between September 2024 and January 2025, affecting price stability and purchase costs.
The IPMAN spokesman said running filling stations has become risky due to the price scare.
Marketers are scared to lift fuel
Ukadike said there is an ample supply of petrol at the Lekki-based refinery and the NNPC depots, however, many filling stations are sceptical about buying the product due to price changes.
Punch reports that Ukadike disagreed with the notion of making more money during an upward price adjustment, saying the only reason for the review was to meet the new market price and not for profit-taking.
According to him, marketers add more to continue to purchase products but not to make a profit as prices surge.
He said that marketers are scared stiff of lifting fuel to avoid losses, after securing bank loans.
The IPMAN scribe said small players in the industry are already closing shop, allowing the big players to have a field day.
Ukadike expressed concerns that the profit margin on an N50 million truck is not close to N300,000, which makes it challenging for marketers to cope.
He ruled out the issue of scarcity due to the robust refining capacity of the Dangote, Port Harcourt and Warri refineries.
According to him, the market may experience an epileptic fuel supply affecting availability and affordability in rural areas.
Landing cost of fuel drops
It had earlier been mentioned that A previous report by Legit.ng said that marketers might resort to petrol imports following the drop in landing costs.
The ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol, has dropped to N922.65 per litre as of Friday, January 24, 2025.
This was disclosed in the updates published by the Major Energies Marketers Association of Nigeria (MEMAN).
This reduction reflects various expenses, including shipping, import duties, and exchange rates.
Petrol landing cost cheaper than Dangote prices
The new imported prices now have a disparity of N32.35 from the N955 per litre price offered at the loading gantry of the Dangote Petroleum Refinery.
Also, MEMAN revealed that the landing cost of Automotive Gas Oil (AGO)-Diesel has dropped to N1,045 per litre while aviation fuel is now N1,063.69 per litre.
This decrease in landing cost could influence the price at which petroleum products are sold to Nigerians and give marketers another reason to consider importation.
New petrol prices as oil falls
Legit.ng earlier reported that oil prices dipped on Monday, January 27, 2025, after US President, Donald Trump, asked the global oil cartel, the Organisation of Petroleum Exporting Countries (OPEC), to scale down prices amid wide-ranging measures to boost US oil and gas production.
Brent Crude fell by 53 cents, or 0.68% to $77.97 per barrel after rising 21 cents on Friday, January 24, 2025.
West Texas Intermediate (WTI) crude sold at $74.16 per barrel, falling 50 cents or 0,67%.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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