A significant shift is occurring in Nigeria's petroleum market as imported fuel becomes more cost-effective than domestically refined products from the Dangote Petroleum Refinery. According to recent data, the landing cost of Premium Motor Spirit (PMS), commonly known as petrol, has dropped to N922.65 per litre, undercutting Dangote's gantry price of N955 per litre by N32.35.

This price differential could prompt oil marketers to return to importing fuel, despite recent efforts to promote domestic refining. The landing cost includes various expenses such as shipping, import duties, and current exchange rates, which are calculated at N1,550 per dollar.

Market analysts note that this development presents an attractive opportunity for private depot owners and independent marketers. "The lower cost of imported petrol is often an incentive to dealers," explained a major marketer who requested anonymity due to lack of authorization to speak on the matter.

Recent Market Activity

Data from the Major Energies Marketers Association of Nigeria shows:

- Current on-spot estimated import parity: N922.65 per litre

- 30-day average cost: N939.52 per litre (up from N929.07)

- Brent crude price: $78.29 per barrel (down from $78.88)

Despite the lower landing costs, retail prices remain elevated, with major marketers in the Federal Capital Territory selling between N990 and N1,010 per litre.

Depot Price Variations

Last week saw notable price adjustments across various depots:

- Nipco: N970 per litre

- Aiteo and Sahara: N960 per litre

- Swift: Reduced from N970 to N960

- Wosbab and AA Rano: N960 per litre

- Port Harcourt's Bulk Strategic Depot: Decreased from N1,005 to N981

- Delta and Calabar depots: Maintained prices between N972 and N990

Recent Import Activity

Port data reveals significant import activity, with oil marketers bringing in 57,301 metric tonnes of fuel (approximately 76.84 million litres) between January 21-22, 2025. Two vessels berthed at Lagos ports:

- Apapa Port: 20,400 metric tonnes

- Tincan Port: 36,901 metric tonnes

Additionally, two vessels of undocumented capacity arrived at the Dangote terminal in Lekki Deep Seaport.

Industry Perspectives

The import situation has sparked debate among industry stakeholders. Billy Gillis-Harry, National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, expressed surprise at the continued imports, citing an informal agreement to pause imports for 180 days to assess Dangote refinery's production capacity.

However, Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, clarified that the non-import directive was merely a "mutual understanding" rather than a binding agreement. He emphasized that the Nigerian Midstream and Downstream Petroleum Regulatory Authority should permit imports that offer more competitive prices.

The current market dynamics highlight the ongoing challenges in Nigeria's petroleum sector, particularly the impact of exchange rates and global market fluctuations on domestic fuel prices. As the industry continues to evolve, the competition between imported and locally refined products may significantly influence future market trends and pricing strategies.