The cost of importing Premium Motor Spirit (PMS), also known as petrol, has significantly increased, with the landing cost now averaging ₦870 per litre, according to MEMAN reports.
It is said that the rise comes at a time when the price supplied by the Dangote Petroleum Refinery is causing market friction and affecting the profitability of both gasoline importers and marketers.
MEMAN said that petrol costs ₦872 per litre on April 28 and ₦868 on April 29. On April 23, the price was ₦859 per litre, reflecting the increasing expense of importing petrol.
This spike has generated problems for importers, who are now unable to sell their products profitably due to pricing pressure.
On the retail side, gasoline prices vary greatly across the country. On Thursday, Dangote sold petrol for ₦840, matching Matrix (Lagos) and Rainoil’s prices.
Other marketers, including Pinnacle, Mao, Sahara, AA Rano, and NIPCO, charged higher prices for the fuel, ranging from ₦889 to ₦842, depending on location.
Retailers in Lagos profit from lower prices, whilst those in the South-South pay more due to logistical costs. First Fortune offered petrol for ₦868, while other retailers including Sigmund and Liquid Bulk fixed their pricing at ₦870. In Ogun State, MRS sells petrol at ₦890 per litre, while Heyden follows at ₦885.
Speaking to Punch, Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), stated that business has been slow due to the continual fluctuation of petrol prices.
“The fluctuation led to arbitrary price changes that are not well-managed,” he claimed.
Despite the challenges, Gillis-Harry emphasized that PETROAN members are committed to providing Nigerians with energy access.
The PETROAN president also noted that the government is attempting to stabilize the situation, and he remained optimistic that the sector’s challenges will finally be handled, benefiting both consumers and companies in the long term.
The Dangote Petroleum Refinery’s pricing approach is a major contributor to the current scenario. Since the Federal Government’s naira-for-crude contract with the plant began, the refinery has continuously reduced petrol costs.
However, Dangote’s price drop has had a severe impact on fuel importers, compelling them to sell gasoline at rates lower than their expenses in order to avoid suffering excessive losses.
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Importers raised prices from ₦860 to ₦950 following the suspension of the naira-for-crude deal in March. Dangote reduced petrol rates to just ₦900 per litre after the Federal Government approved the arrangement.
However, according to S&P Global, the pricing of refined petroleum products at Dangote’s refinery has inadvertently boosted fuel imports into Nigeria.
S&P Global stated that, despite a global drop in crude oil prices, Dangote did not significantly cut its gantry pricing, resulting in additional imports into West Africa.
According to the paper, “Between April 1 and April 9, the Eurobob M1 swap fell from $734.25 per metric tonne to $603/MT, a 17.9% drop, before recovering slightly.” Dangote’s truck price at the gantry decreased by only 1.7% from ₦880/liter to ₦865/liter (later ₦835) during the same time period.
“This has encouraged a flood of products into West Africa, where high domestic prices have led marketers to import from international traders in greater volumes.”
