Fuel to sell at N935 per litre from Monday –IPMAN

•As mixed reactions trail Dangote, NNPCL petrol price cut

By Adewale Sanyaolu

A price war appears to be brewing between the two main gladiators in the petroleum downstream sector, Dangote Refinery and the Nigerian National Petroleum Company Limited (NNPC Ltd). At the centre of it is a superiority contest over who controls the pump price of petrol, the most demanded commodity in the petroleum sector value chain.

Dangote Refinery and NNPC Ltd, last week, slashed the ex-depot price of petrol from N1,020 and N970 per litre to N899.50k per litre, respectively. The announcement by Dangote coincided with its partnership with MRS, which has set the retail price of petrol at N935 per litre across its outlets nationwide.

Last Thursday, Dangote announced a price slash to N970 per litre for bulk marketers as part of measures to provide much relief for Nigerians ahead of the holiday season. A similar price drop was also announced by NNPC Ltd on Saturday, reducing its price from N1.020 to N899 per litre.

Meanwhile, the Independent Petroleum Marketers Association of Nigeria (IPMAN), said the price of petrol will drop to N935 per litre by Monday in view of Dangote Refinery’s new arrangement.

IPMAN said the new price was necessitated by the reduction in Dangote Refinery’s fuel ex-depot price and uniform arrangement, which would enable marketers to sell at N935 in their outlets nationwide.

However, despite the slight price crash, consumers have expressed frustration over the lack of immediate impact at fuel stations.

Marketers and refiners, on the other hand, are praising the move as a key milestone in the ongoing deregulation of the petroleum sector. They argue that the price reduction reflects the positive effects of a freer market, which they believe will lead to greater efficiency, investment, and long-term benefits for the industry.

Reacting to the price war, President of Consumer Rights Price Index Watch, a watchdog that tracks prices of commodities across the country to protect consumers’ interests, Mr. Julius Opara, said while the price reduction by the two major contenders in the downstream sector comes as a relief, Nigerians were yet to feel the positive impact at the pumps.

He lamented that despite the reduction of the ex-depot price of petrol, most filling stations operated by both major and independent marketers were still selling above N1,000 per litre.

“So where lies the gain in the price reduction if prices are still above N1,000 per litre? The truth is that marketers that ought to reflect these changes at the pumps were not doing so. The gains are majorly for the marketers and not consumers. If the situation were to be the other way round (increase in ex-depot price), the reflection at the pumps would have been immediate. But now that it is a downward review, they are not keen about adjusting their pumps,” he said.

He added that the reduction in ex-depot price to N899 per litre should ordinarily have reflected at the pumps. Giving a cost breakdown analysis, Opara said most marketers were all out to maximise profit at the detriment of consumers.

He said at N899 per ex-depot price, a marketer selling a litre of petrol at N1,015 per litre makes a profit of N116 per litre, adding that if N116 per litre is multiplied by a truckload of 33,000 litres of petrol, that translates to a profit margin of N3,828,000 per truck.

Findings by Daily Sun on Sunday showed that marketers were yet to reflect the drop in ex-depot prices of petrol at their various retail outlets.

For instance, most NNPC retail outlets in Lagos were still selling at N1,015 per litre, a price that has been in force before the price slash and has remained till this moment.

On the other hand, most major marketers, which included 11 Plc operating under the Mobil trade name, Ardova, Conoil, and TotalEnergies, were all still selling above N1,050 per litre, while their independent marketers were selling within a price range of N1,100 to N1,200 per litre, depending on the location.

When asked why marketers were yet to adjust their pumps to reflect the cut in ex-depot price of petrol, National President of Petroleum Products Retail Outlets Owners of Nigeria (PETROAN), Mr. Billy Gillis Hary, told Daily Sun that the changes would be gradually effected.

He lauded the management of NNPC Ltd and Dangote for slashing the ex-depot price to N899 and N899.50 per litre, respectively.

“This price reduction, a decrease of N71 per litre from the initial price of N970, is a significant relief for motorists and Nigerians at large, especially during the holiday season,” he said.

According to the National President of PETROAN, Dr. Billy Gillis Hary, “The price reduction will alleviate transport costs and bring succor to Nigerians during this festive period.”

Hary commended NNPC Ltd for ensuring sufficient PMS stocks during the yuletide season. However, he urged NNPC Ltd to revisit its PMS selling rate to foster competition in the downstream sector.

“The reduction in petrol prices by Dangote Refinery has shown that competition can benefit consumers. We call on NNPC Ltd to facilitate the privatization of the Port Harcourt refinery, which will introduce innovative consumer incentives, improve product quality, and enhance service delivery,” he said.

In his comments, the Publicity Secretary of Crude Oil Refiners Association of Nigeria (CORAN), Mr. Eche Idoko, in a WhatsApp response to Daily Sun inquiry, said it’s typical for a deregulated market to see such price fluctuations, saying it is one of the characteristics of deregulation that the industry had highlighted.

“As the industry settles into the regime of full deregulation, we are bound to see competition amongst players, which ultimately will benefit the consumers. These competitions will be around prices, product quality, and credit lines available to bulk buyers. These are the advantages local refining brings. As more local refineries come on stream in the coming months, we shall see these positive trends of refiners and suppliers wooing consumers with price reduction and all manner of incentives. I think this is a positive for the industry and consumers.”