Nigerian depot owners and petroleum marketers are cutting petrol and diesel prices at depots despite rising international crude oil prices, as weak demand, subdued patronage and sufficient product availability put pressure on downstream selling prices.
As at the time of writing, Brent crude rose 4.11 per cent to $113.30 per barrel, while U.S West Texas Intermediate (WTI) gained 2.36 per cent to $99.44 per barrel, highlighting the contrast between rising international benchmarks and price reductions at selected Nigerian depots.
Check by Petroleumprice.ng shows that in Port Harcourt, Masters depot reduced its Automotive Gas Oil (AGO), commonly known as diesel, price from ₦1,810 per litre on October 20 to ₦1,805 on October 22.
In Warri, A.Y.M. Shafa lowered its diesel price from ₦1,850 per litre on October 21 to ₦1,840 on October 22. Rainoil, however, maintained its price at ₦1,830 per litre across October 21 and 22.
Lagos recorded the lowest reported diesel prices among the depots covered in Thursday's data. On October 21, Ibachem, African Terminal and TotalEnergies quoted ₦1,788 per litre. By October 22, African Terminal and TotalEnergies had reduced their prices to ₦1,785 per litre.
Other Lagos depots, including Ascon, Gulf Treasure, Integrated and Duport, also quoted diesel at ₦1,785 per litre on October 22.
Petrol prices also varied across depots between October 21 and 22. In Lagos, Aiteo reduced its Premium Motor Spirit (PMS) price from ₦1,344 per litre on October 21 to ₦1,342 on October 22. Ardova lowered its price from ₦1,347 to ₦1,343, while 11Plc reduced its price from ₦1,347 to ₦1,344. Nipco quoted ₦1,342 per litre on October 22.
In Port Harcourt, Masters, Bulk Strategic and TSL quoted petrol at ₦1,342 per litre on October 22, down from ₦1,344 at Masters and Bulk Strategic on October 21. Stock Gap also quoted ₦1,342 per litre on Thursday.
Calabar recorded further reductions. Soroman lowered its petrol price from ₦1,345 per litre on October 21 to ₦1,343 on October 22, while Matrix quoted ₦1,342 per litre on October 22.
The reductions come as rising international crude prices threaten to increase the cost of replenishing petroleum products. However, movements in crude benchmarks do not translate immediately or uniformly into depot prices, which also depend on existing inventories, product availability, purchasing costs and competition among suppliers.
Where demand is weak and supplies remain adequate, marketers may struggle to pass higher replacement costs on to customers without losing sales. Cutting prices can help attract buyers, improve stock turnover and release working capital tied up in inventory.
However, lower selling prices do not necessarily mean that marketers are buying products more cheaply. Operators holding stocks purchased at higher prices may face tighter margins when reducing their prices to remain competitive.
For Nigeria's downstream market, the key question is whether the current price pressure will persist if international crude benchmarks continue to rise. Sustained increases could eventually push up replacement costs, particularly if product availability tightens or demand strengthens.
For now, Petroleumprice.ng's data shows that petrol and diesel prices are dropping in many depots nationwide. The figures point to a market where local demand and competition are influencing selling prices despite the rise in international crude oil benchmarks.