Global oil prices surged on Wednesday, with Brent crude trading at $66.60 and West Texas Intermediate (WTI) at $63.15, yet Nigerian depot prices for key petroleum products moved in the opposite direction, recording notable declines across major supply hubs.
Price Movements Across Depots
In Lagos, PMS dropped at several depots: Dangote refined petrol stood at ₦821 per litre (down from ₦821.5), while AITEO cut its PMS to ₦820.5 from ₦821. For AGO, Dangote reduced diesel to ₦970 from ₦991, while AITEO dropped to ₦972 from ₦985.
In Warri, price corrections were also visible. Matrix sold PMS at ₦837, compared to ₦838 earlier in the week, while Rainoil maintained PMS at ₦838 but reduced AGO to ₦1,020 from ₦1,028. Taurus followed suit, cutting AGO to ₦1,020 from ₦1,030.
At Calabar, Evergreen trimmed PMS to ₦832 from ₦835, while Zone 4 aligned its PMS price at ₦832 compared to ₦837 previously. Alkanes, however, held steady at ₦840.
In Port Harcourt, depot operators softened their positions. Masters revised AGO down to ₦1,034 from ₦1,045, while Bulk Strategic adjusted to ₦1,039 from ₦1,045. TSL cut PMS marginally to ₦837, from ₦839 earlier.
Market Dynamics Behind the Price Cuts
Industry operators explained that the decline in depot prices despite climbing global crude oil benchmarks is tied to intensifying competition in Nigeria’s downstream sector.
The ongoing battle for market share between Dangote Petroleum Refinery and private depot owners is exerting downward pressure on prices. Dangote’s rollout of a nationwide fuel distribution plan, coupled with its CNG-powered truck initiative, has raised competitive stakes, forcing depot owners and importers to price cautiously.
Marketers revealed that depots are deliberately adopting a restrained pricing strategy to ensure Dangote does not gain a stronger edge in the distribution network. This “defensive pricing” is intended to keep customers loyal and slow Dangote’s growing dominance in the domestic market.
Outlook
Analysts expect the price war to continue in the short term, with depot operators prioritizing market retention over immediate profit margins. However, they caution that sustained global crude oil gains could eventually tighten the margins of private depots, compelling further strategic adjustments in the weeks ahead.