Petrol landing cost in Nigeria has dropped to N797 per litre, as competition heats up in the fuel market, leading to significant price cuts
The landing cost of imported Premium Motor Spirit (PMS), commonly known as petrol, has dropped to N797 per litre as of Monday, reflecting the ongoing volatility in Nigeria’s fuel sector.
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This latest reduction comes amid increasing concerns from oil marketers about the unsustainable price war, which has led to significant financial losses for operators across the country.
The recent price drop follows a series of competitive price cuts in the downstream oil industry. Last week, the Dangote refinery quietly reduced its petrol price at its loading gantry, lowering the cost of petrol from N825 per litre to N815 per litre.
This reduction prompted private fuel depots to follow suit, adjusting their prices downward to maintain competitive positioning in the market.
Energy experts have expressed concerns over the long-term effects of these continuous price cuts. They highlight that oil marketers and importers are incurring daily losses estimated at N2.5 billion, with monthly losses amounting to N75 billion.
This is primarily due to the declining prices of PMS, which are pushing the margins of oil marketers to unsustainable levels.
In response to these challenges, marketers under the Petroleum Tanker Drivers Association of Nigeria (PETROAN) have called for the introduction of regulations that would mandate fuel price adjustments only every six months. However, it remains uncertain whether the regulatory body will approve such a request.
Hammed Fashola, the National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), said that although the ongoing price reductions have benefited Nigerian consumers, the unpredictability in the fuel price market has forced marketers to scale back their purchases, resulting in daily losses.
According to the latest data from the Competency Centre’s daily energy report, the total cost of importing a litre of petrol now stands at N797.66, down from N817.82 the previous week.
This reduction of N20.16 per litre comes amid a fluctuating international fuel market, where factors such as crude oil prices, shipping costs, and foreign exchange rates heavily influence local prices.
The latest report also revealed that the price of Brent crude oil has increased slightly to $70.58 per barrel, up from $69.88 per barrel, with an exchange rate of N1,517.93 per dollar.
These fluctuations continue to affect the landing cost of imported petrol, which remains subject to frequent adjustments due to changing global conditions.
Interestingly, the Dangote refinery has also reduced its ex-gantry price for diesel, dropping the cost from N1,020 per litre to N870 per litre, a significant price cut of N150.
This move has added to the uncertainty in the sector, as marketers continue to navigate the volatile pricing environment.
Despite these reductions, it remains to be seen whether the price cuts will cause a disruption in the relationship between the Nigerian National Petroleum Company (NNPC), the Dangote refinery, and private depot owners.
The situation underscores the challenges in the Nigerian fuel market, where price volatility, regulatory uncertainty, and competitive pressures continue to impact both marketers and consumers.
As the price war in Nigeria’s oil sector intensifies, stakeholders are keeping a close eye on the evolving market dynamics, with hopes that a more stable and predictable pricing framework will emerge to benefit both marketers and the wider Nigerian population.
