More Competition As Petrol Landing Cost Drops Below N800 Per Litre

• Petrol marketers are set to compete with Dangote Refinery's fuel prices as the cost of landing petrol decreases
• The drop in depot prices is attributed to the changes in global crude oil prices, with Brent crude dropping below $70 per barrel
• The changes in landing costs are expected to influence the price at which petrol is sold to consumers

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

Fuel prices at filling stations are now expected to reduce as the cost of importing petrol drops significantly.

The change is driven by a sharp decline in global crude prices, as Brent crude has fallen to $69 per barrel.

Punch reports that major oil marketers are working on offering a lower ex-depot price against the gantry loading cost of N825 per litre set by Dangote Petroleum Refinery.

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Commercial drivers react to Dangote refinery, NNPC new fuel prices

Marketers revealed that the landing cost of Premium Motor Spirit (petrol) imported into Nigeria has decreased to N774.72 per litre.

They anticipate this significant drop could potentially lower pump prices to around N800 per litre.

If the price reduction is implemented, retail marketers will have to choose between buying from Dangote Refinery or depots with imported products.

New fuel prices in Nigeria

Already, depots across Nigeria have adjusted their ex-depot prices. AA RANO and MENJ depots now sell at N830 per litre, while MRS TINCAN also priced its products at N830.

It was also reported that WOSBAB provided a price estimate of N832, AITEO set its price at N832, and RAINOIL depot sold at N831 per litre.

Meanwhile, marketers who purchased two million litres from the Dangote Refinery at N825 per litre are selling at N835, making a profit of N1 per litre, N4 lower than the prices offered by private depots.

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Optima Energy to sell Dangote Refinery petrol as price list for states announced

Nigerians to benefit from price competition

This price competition in the downstream sector has been described by Bismarck Rewane, managing director of Financial Derivatives Company as good news for consumers.

According to Rewane, Nigerians will gain from the ongoing petrol price competition.

Rewane explained:

"In a price war, nobody wins; the consumers win in the short run, and then eventually, the market goes back to where it should be.

"But, at the end of the day, between now and June, the price leadership will be firmly established."

Speaking on the expected changes, the National Publicity Secretary of the Independent Marketers Association of Nigeria, Chief Ukadike Chinedu, stated:

"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".

NNPC crashes petrol prices to rival Dangote Refinery

Read also

Dangote, NNPC, other marketers may crash petrol prices again as crude oil prices fall

Legit.ng previously reported that the Nigerian National Petroleum Company Limited (NNPC) reduced its pump price of petrol to N860 per litre.

Similarly, Dangote refinery disclosed in a statement that three filling stations in Lagos, including MRS, AP, and Heyden, would sell the product at N860 and N865 per litre to Nigerians.

Commercial drivers have also reacted to NNPC's new fuel prices.

Proofreading by James Ojo, copy editor at Legit.ng.

Source: Legit.ng