Competition is intensifying in Nigeria’s downstream market as depot operators and bulk-market players sell PMS and AGO below current landing costs and Dangote Petroleum Refinery’s gantry prices, creating a sharp divergence between replacement economics and actual wholesale market prices.
As at the time of writing, 07:50am (WAT), Brent crude was trading at $108.60 per barrel, up 2.79%, while WTI stood at $105.90 per barrel, gaining 4.42%. The latest movement comes as continuing attacks on energy infrastructure and disruptions around key Middle East supply routes keep international crude prices elevated.
Against that backdrop, the current PMS landing cost has risen to ₦1,420 per litre, while AGO landing cost stands at ₦1,894 per litre. Dangote Refinery’s latest gantry prices are ₦1,350 per litre for PMS and ₦1,850 per litre for AGO, meaning the current PMS landing cost is ₦70 above Dangote’s rate, while AGO landing cost is ₦44 above the refinery’s price.
The wholesale market, however, is moving in the opposite direction in several locations. In Calabar, Mainland is selling PMS at ₦1,347 per litre, Northwest at ₦1,345 and Soroman at ₦1,346. The prices are between ₦73 and ₦75 below the current PMS landing cost and as much as ₦5 below Dangote’s ₦1,350 rate.
Port Harcourt is showing a similar pattern, with Masters and Liquid Bulk selling PMS at ₦1,350 per litre, while TSL is at ₦1,347. In Warri, Nepal and Keonamex are both offering PMS at ₦1,350 per litre. These prices remain below the ₦1,420 landing cost and are also at or below Dangote’s current ₦1,350 refinery price.
The lower Calabar prices are being linked by market participants to the availability of Dangote products in the region. With Dangote Refinery having suspended product supply to Lagos amid increased petrol imports, market sources said the refinery is routing more of its products towards Calabar, Port Harcourt and Warri, where increased availability is putting pressure on wholesale prices.
Lagos presents a different market dynamic. African Terminal, Integrated, Duport and Ibachem are all offering AGO at ₦1,830 per litre, which is ₦64 below the ₦1,894 landing cost and ₦20 below Dangote’s ₦1,850 rate. Market participants say the pricing is being driven partly by bulk buyers who purchased products earlier and are now reselling those volumes, giving them room to sell below current replacement cost.
Industry sources describe this as a form of price manipulation in the wholesale market, particularly as bulk buyers with earlier stock positions have increasingly dominated the trading space. Having bought at lower prices, the traders can resell below Dangote’s current rate and still protect their margins, even though an operator replacing the same volume at today’s landing cost would face a substantially higher acquisition cost.
The effect is a widening disconnect between the headline landing cost and the price at which physical products are changing hands. On PMS, current wholesale offers in Calabar, Port Harcourt and Warri are as much as ₦75 below landing cost. On AGO, the Lagos offers are ₦64 below landing cost, despite the fact that current international crude prices are pushing replacement costs higher.
For the downstream market, the immediate issue is not simply whether products are available, but the price at which existing stocks can be replaced. While cheaper inventories and aggressive bulk trading are keeping wholesale offers below both landing costs and Dangote’s rates in several locations, sustained crude prices above $100 could eventually force a repricing once those lower-cost stocks are exhausted.