In a significant development in Nigeria's downstream oil sector, the Dangote Petroleum Refinery has further reduced the loading cost of petrol from N825 to N815 per litre, intensifying the ongoing price war. This move, implemented on Thursday, has been met with enthusiasm by oil marketers, who are now sourcing products directly from the refinery, bypassing private depot owners. The reduction is expected to compel private fuel depots to adjust their prices downward to remain competitive.
This price cut follows a recent drop in the landing cost of imported petrol to N774.72 per litre, as reported by The PUNCH earlier this week. Industry stakeholders attribute this decline to factors such as shipping costs, import duties, and exchange rates. The National Publicity Secretary of the Independent Marketers Association of Nigeria (IPMAN), Ukadike Chinedu, noted that the reduction in crude oil prices could further drive down petrol prices to around N800 per litre.
However, the Dangote Refinery's latest adjustment brings the total cost to N825 per litre when the N10 levy charged by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is included. In response, private depot owners in Lagos have also reduced their loading costs to N825 per litre, down from N830 earlier this week. Several depots, including AA RANO, MENJ, and Bovas, have adjusted their prices to remain competitive, with some offering rates as low as N826 per litre.
Meanwhile, the Dangote Refinery has received additional crude oil shipments from the Nigerian National Petroleum Company Limited (NNPCL), bolstering its production capacity. The delivery was confirmed by a high-level NNPCL. The crude oil vessels, originally delayed due to uncertainties surrounding the naira-for-crude deal, have now sailed to the $20 billion Lekki-based refinery.
This development follows a meeting of the Technical Sub-Committee on the Naira-for-Crude Policy in Abuja, where stakeholders reviewed the policy's progress and reaffirmed their commitment to its implementation. The NNPCL presented a crude delivery report, while the NMDPRA provided updates on domestic production, including operations at the Dangote Refinery, NNPCL Warri Refinery, and Port Harcourt Refinery.
Industry experts attribute the ongoing decline in petrol prices to fierce competition in the downstream sector, driven by deregulation and increased local refining capacity. A major marketer, who preferred anonymity, explained that the competition has forced prices down, with petrol potentially dropping below N800 per litre. He emphasized the importance of maintaining a balance between local production and imports to ensure prices remain low while encouraging local refiners to keep their prices competitive.
