Marketers Resist Dangote’s Petrol Price Cut, Maintain High Pump Rates Despite Crude Dip
Despite a recent reduction in the ex-depot petrol price by the Dangote Petroleum Refinery from N880 to N840 per litre, most fuel marketers across Nigeria have declined to lower their pump prices. According to various marketers interviewed, they are unable to reflect the new prices because they are still selling previously acquired stock at the higher rate of N900 or above per litre. This resistance has left fuel pump prices stagnant across much of the country, with average retail prices still ranging from N920 to N935.
Depot operators, including RainOil, Pinnacle, Matrix, and others, have adjusted their gantry prices in line with the Dangote refinery’s new rate, with prices falling to about N845 in Lagos and N860 in Warri and Port Harcourt. However, these changes have yet to translate to any significant relief at the pump for consumers. Dangote’s retail partners, such as MRS and Heyden, have also not moved to enforce lower pump prices, influencing others to maintain current rates.
Retailers defend their decision by arguing that lowering prices immediately would result in significant losses, especially for those who recently purchased large fuel volumes at the higher rates. Billy Gillis-Harry, President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), emphasized that retailers need to exhaust their current inventory before implementing any price drop. A typical 45,000-litre fuel delivery bought at N920 would cost the retailer over N3.6 million in losses if sold at N840.
Experts warn that as long as price volatility continues, marketers will be hesitant to respond swiftly to price reductions. Gillis-Harry has reiterated the association’s demand for regulatory stability, calling on the government to enforce a six-month price lock-in window to protect businesses from sudden price swings. He also urged the Nigerian National Petroleum Company Limited (NNPC) to ramp up local crude supply for domestic refining to reduce dependency on global markets.
The petrol price hike had previously followed rising crude prices due to the Israel-Iran conflict, with Brent hitting $77 per barrel. But with crude prices now falling—Brent and WTI dropping to around $67 and $65 respectively, analysts expect that pump prices will eventually adjust within a week or two, provided geopolitical stability holds. However, until old stock clears, Nigerians will continue to pay the higher prices at the pump.
Source: Punch