The recent decision by Dangote Petroleum Refinery to cut the ex-depot price of petrol from ₦950 to ₦890 per litre has sparked mixed reactions among petroleum marketers.
This adjustment, announced on Saturday, aims to reflect lower global crude oil prices and bring relief to Nigerian consumers. According to Dangote Group’s Chief Branding Officer, Anthony Chiejina, the price reduction is part of efforts to align with international market trends while ensuring economic benefits for the country.
Marketers’ Concerns
While consumers are likely to benefit, some marketers are worried about the financial impact. Many purchased petrol at the previous rate and now face potential losses as they’re forced to sell their stocks at reduced prices to stay competitive.
Hammed Fashola, Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), explained, “If a marketer bought petrol at ₦950 and others start selling at ₦890, they’ll have no choice but to lower their prices, leading to losses.”
This sudden adjustment has also sparked fears among marketers about future pricing unpredictability, with some suggesting better communication could help avoid such situations.
Competitive Market
The price slash follows reports that some importers were considering bypassing locally refined petrol in favour of cheaper foreign options. This competition has pressured Dangote Refinery and other suppliers to lower prices to retain market share.
Billy Gillis-Harry, President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), described the reduction as a welcome development, saying it would reduce the cost of living, transportation, and inflation rates, ultimately benefiting consumers.
Ripple Effect
The Nigerian National Petroleum Company (NNPC) may also reduce its prices to stay competitive. “In a deregulated market, competition forces everyone to adjust,” said Chinedu Ukadike, IPMAN’s spokesperson.
However, marketers remain cautious, worried about potential losses when prices fluctuate unexpectedly. “Marketers have to be careful about purchasing to avoid running into debt,” Ukadike warned.
Despite these challenges, industry leaders agree the competition will lead to better pricing for consumers, marking a positive step for Nigeria’s oil sector.