Nigeria’s downstream petroleum market witnessed another round of price reductions on Monday, with the Dangote Petroleum Refinery and several major fuel marketers lowering depot prices for Premium Motor Spirit (PMS), popularly known as petrol, and diesel.
This development comes at the backdrop of pressures from the Federal Government (FG) as well as growing competition and improving product availability.
Earlier yesterday before the price adjustments, the Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, told a stakeholders’ meeting that the current retail price of petrol does not reflect the sharp decline in price of crude oil.
The meeting, convened by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), was attended by representatives of the Dangote Refinery, Major Energy Marketers Association of Nigeria (MEMAN), IPMAN, Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Nigerian Association of Road Transport Owners (NARTO), and Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN).
The latest mid-day depot price report showed that Dangote Refinery reduced it’s ex-depot petrol price in Lagos by N3 per litre, from N1,079 to N1,076 per litre, while maintaining its diesel price at N1,500 per litre.
The reduction comes as several marketers also adjusted their prices downward in an apparent bid to remain competitive in an increasingly price-sensitive market.
Among the major Lagos depots, NIPCO cut its petrol price by N2 to N1,076 per litre, while Pinnacle lowered its price by N3 to N1,075 per litre. Sahara, AIPEC, and African Terminal each reduced prices by N4, bringing their petrol prices to N1,075 per litre.
Aiteo maintained its petrol price at N1,075 per litre.
Diesel prices also softened across several depots. Rain Oil reduced it’s AGO price by N15 to N1,430 per litre, while Ibeto, Duport, and Ibachem all cut prices to N1,430 per litre. Dangote Refinery, however, retained its diesel price at N1,500 per litre.
In Port Harcourt, marketers recorded even steeper reductions. Matrix slashed its petrol price by N8 to N1,087 per litre and cut diesel by N55 to N1,465 per litre, representing the biggest diesel price reduction recorded during the trading session.
Sigmund also reduced its petrol price by N12 to N1,082 per litre, although it raised its diesel price slightly by N2 to N1,463 per litre.
The downward trend extended to other regions. In Calabar, Fynfield reduced its petrol price by N7 to N1,090 per litre, while Soroman lowered its price by N5 to the same level.
In Warri, Matrix and Prudent both reduced petrol prices by N5 to N1,085 per litre. On the diesel side, Prudent cut its price by N25 to N1,475 per litre, while A.Y.M. Shafa lowered its diesel price by N3 to N1,455 per litre.
Industry analysts said the latest adjustments reflect heightened competition among suppliers following increased domestic refining capacity and relatively stable international crude oil prices.
Speaking after a stakeholders’ meeting on Cost-Reflective Pricing of PMS Lokpobiri said while the government did not interfere when petrol prices rose in response to higher crude oil prices, there was now no justification for maintaining current pump prices with Brent crude trading below $70 per barrel.
“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 marketers were constructive and would continue until a framework was agreed to ensure petrol prices better reflected developments in the global crude oil market.
“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, Chief Executive of NMDPRA, Mallam Rabiu Umar, said the current disconnect between falling international crude prices and sustained domestic retail PMS prices made the engagement with marketers necessary.
He noted that previous consultations with stakeholders had helped ease prices in the domestic Liquefied Petroleum Gas (LPG) market and expressed confidence that similar dialogue would deliver positive results for 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 decline below N800 per litre as independent marketers begin purchasing products directly from the Dangote Petroleum Refinery.
IPMAN National President, Abubakar Garima, said the association had already reduced petrol prices by about N125 per litre across the country and would continue to lower prices whenever product acquisition costs decline.
