In a significant shift for Nigeria’s energy market, the price of Premium Motor Spirit (PMS), also known as petrol, has fallen sharply to ₦739 per litre ahead of the Yuletide season.
Motorists in Lagos have formed long queues in some MRS filling stations in Lagos as they seek to buy petrol. The pump price drop followed the recent reduction in ex-depot price by Dangote Refinery from ₦828 to ₦699 per litre.
Speaking at a press briefing on Sunday in Lagos, President of the Dangote Group, Alhaji Aliko Dangote, said the refinery would liaise with its partners and other independent marketers to bring down the price of petrol to at least ₦739 or ₦740 per litre.
“We are going to use whatever resources we have to make sure that we crash the price down. By the grace of God, within a week to 10 days, we will be able to deliver. We don’t want to see, at least for this December and January, petroleum products sold above N740 nationwide,” Dangote had said.
Dangote, who emphasised the importance of domestic refining, expressed concerns that while local refiners are striving to produce quality petroleum products that meet specified standards, importers are being allowed to bring in blended substandard products.
He accused some marketers of conspiring to keep prices artificially high and stated his intent to “fight” to bring prices down.
Checks revealed that not all MRS filling stations and other distribution outlets partnering with the refinery have implemented the latest price cut. While some MRS outlets in parts of Lagos, including Alapere and Victoria Island, have started selling at ₦739 per litre, others were still selling between ₦875 and ₦880 as of Wednesday, December 17.
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Pinnacle Daily observed that some MRS stations and Ardova Plc located along the Oshodi-Isolo Motorway were selling at ₦880 per litre on Wednesday. An NNPC retail outlet along the motorway displayed ₦875 per litre.
The petrol price reduction has brought immediate relief to motorists and businesses. Analysts believe the measures will stabilise fuel prices in the medium term if supply remains stable, bringing relief to consumers during the holiday season.
A commercial bus driver, Mr Ajere Adejare, expressed joy about the petrol price reduction, stressing that it would help to ease transport costs, especially during the festive season, if the lower price is sustained. He called on petroleum marketers to ensure that the price drop is implemented across all outlets nationwide for Nigerians to feel the positive impact. “The fuel price drop, especially now that we are going to celebrate December and the new year, is a good one. We hope that there will be adequate supplies across the country so that there will be no scarcity or long lines at filling stations like we used to see in the past,” he said.
“I will go and buy some gallons of fuel and keep it for my generator during this Christmas season,” said Emeka Itodo, a resident of Ilasamaja.
Marketers Kick
While motorists have welcomed the relief, the move has caused friction within the industry.
The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) strongly condemned Dangote’s price reduction announcement. PETROAN President Billy Gillis-Harry said the price cut would make marketers who recently bought stock at higher prices lose money running into billions of naira.
Gillis-Harry, who appeared on Channels Television, explained that the marketers support price reduction but not abruptly, in a manner that makes them incur losses due to old stock bought at a higher cost.
He said, “We are happy if prices come down; we will be able to get lower capital for business. But what we are addressing there is that only a few days ago, our members bought products in bulk, and they just arrived, and before they can even sell one litre, in the same market, the price has been reduced by N129 per litre.
“Some of these products are about 120 metric tonnes; now, multiply the size by N129 per litre. We are talking about billions of naira that are going to be lost. Who is going to pay for that money?”
He argued that sudden adjustment of prices in this manner violates the Petroleum Industry Act (PIA) 2021, which states that prices should be determined by market forces. PETROAN described it as a “dirty price war” that is unsustainable.
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He added that the approach by Dangote could cause long-term harm to market stability, potentially leading to a monopoly.
However, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has been more positive. Its National Secretary confirmed prices are dropping and expressed optimism that a more significant nationwide reduction would follow once the current expensive stock is exhausted.
Financial Impact of Price Cut
Analysts have pointed out that the price war created by the move comes with a heavy financial burden. Independent marketers risk losses estimated at ₦80 billion, while petrol importers could face monthly hits of ₦102 billion. Dangote Refinery is reportedly absorbing around ₦91 billion monthly to sustain the lower prices.
Other partners of the Dangote Refinery, like Ardova Plc, are expected to adopt the lower pricing soon. Prices in other states may fall further as stations replenish stock bought at the new, lower depot price of ₦699 per litre.
Victor Ezeja is a passionate journalist, scholar and analyst of socioeconomic issues in Nigeria and Africa. He is skilled in energy reporting, business and economy, and holds a master's degree in mass communication.
