Nigeria’s downstream petroleum sector recorded another round of depot price reductions on Monday as the Dangote Petroleum Refinery and several major fuel marketers lowered the prices of Premium Motor Spirit, also known as petrol, and Automotive Gas Oil (diesel).
According to Vanguard, the latest price cuts come amid increasing competition in the deregulated market, improved availability of petroleum products, and growing pressure from the Federal Government for retail prices to reflect the decline in global crude oil prices.
Before the fresh adjustments, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, told stakeholders that current petrol prices no longer reflect prevailing crude oil prices, which have dropped significantly.
The meeting, organised by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, brought together representatives of the Dangote Petroleum Refinery, Major Energy Marketers Association of Nigeria, Independent Petroleum Marketers Association of Nigeria, Depots and Petroleum Products Marketers Association of Nigeria, Nigerian Association of Road Transport Owners, and the Petroleum Products Retail Outlets Owners Association of Nigeria.
According to the latest mid-day depot pricing report, Dangote Refinery reduced its Lagos ex-depot petrol price by N3 per litre, from N1,079 to N1,076, while retaining its diesel price at N1,500 per litre.
Other marketers also reviewed their depot prices downward in response to increasing market competition.
In Lagos, NIPCO reduced its petrol price by N2 to N1,076 per litre, while Pinnacle cut its price by N3 to N1,075 per litre. Sahara, AIPEC and African Terminal each lowered their prices by N4, bringing their petrol rates to N1,075 per litre. Aiteo, however, maintained its petrol price at N1,075 per litre.
Diesel prices also declined across several depots. Rain Oil reduced its Automotive Gas Oil price by N15 to N1,430 per litre, while Ibeto, Duport and Ibachem also adjusted their diesel prices to N1,430 per litre. Dangote Refinery left its diesel price unchanged at N1,500 per litre.
In Port Harcourt, Matrix recorded one of the sharpest reductions, cutting its petrol price by N8 to N1,087 per litre and reducing diesel by N55 to N1,465 per litre.
Sigmund also lowered its petrol price by N12 to N1,082 per litre but increased its diesel price slightly by N2 to N1,463 per litre.
The downward movement in prices extended to other parts of the country. In Calabar, Fynfield reduced its petrol price by N7 to N1,090 per litre, while Soroman cut its price by N5 to the same level.
Similarly, in Warri, Matrix and Prudent both lowered petrol prices by N5 to N1,085 per litre. Prudent also reduced its diesel price by N25 to N1,475 per litre, while A.Y.M. Shafa cut its diesel price by N3 to N1,455 per litre.
Industry analysts attributed the latest adjustments to stronger competition among suppliers, rising domestic refining capacity and relatively stable international crude oil prices.
Speaking after the stakeholders’ meeting on cost-reflective pricing of PMS, Lokpobiri maintained that marketers should adjust petrol prices in line with falling crude oil prices.
“NMDPRA never faulted anybody as far as the price was concerned because we are operating a fully deregulated economy.
“But deregulation doesn’t mean excessive profiteering. The Petroleum Industry Act also places responsibility on NMDPRA to ensure that steps are taken to prevent unnecessary profiteering.
“When Brent crude was about $118 per barrel, prices adjusted rapidly. Now that crude prices have dropped significantly, why has the pump price not come down in the same way?” he asked.
The minister said discussions with downstream operators had been productive and would continue until an acceptable framework was developed to align domestic petrol prices with global crude oil trends.
“We had very fruitful and frank discussions with the marketers and leaders of the downstream sector with a view to driving down the price of PMS. The engagements are still ongoing.
“We told them the concerns of Nigerian consumers, and they have agreed to go back and think of what concrete steps can be taken. Discussions are ongoing, and we believe we are getting somewhere,” he said.
Also speaking, the Chief Executive of NMDPRA, Mallam Rabiu Umar, said the disparity between declining global crude oil prices and sustained domestic petrol prices informed the meeting with marketers.
He recalled that similar engagements had previously helped moderate Liquefied Petroleum Gas prices and expressed optimism that ongoing discussions would also benefit petrol consumers.
“Deregulation is not a licence for market distortion or unfair consumer pricing. Sustainable profitability for marketers and consumer welfare are not mutually exclusive,” Umar said.
Meanwhile, IPMAN said petrol prices could drop below N800 per litre once independent marketers begin sourcing products directly from the Dangote Petroleum Refinery.
The association’s National President, Abubakar Garima, said independent marketers had already reduced petrol prices by about N125 per litre nationwide and would continue to lower prices whenever the cost of purchasing products declines.
