The recent decision by Dangote Petroleum Refinery to slash the ex-depot price of Premium Motor Spirit (PMS) has sparked concerns among petroleum marketers, with many fearing significant financial losses. On Saturday night, the refinery announced a reduction in price from ₦950 to ₦890 per litre, citing favorable global energy trends and a decline in international crude oil prices.
A statement by the Group’s Chief Branding and Communications Officer, Anthony Chiejina, emphasized that the move aims to align with market realities and ensure that consumers benefit from changes in international crude oil prices. He also urged marketers to pass on the benefits of the price reduction to the public, highlighting its potential to lower fuel costs nationwide and stimulate economic relief.
However, while the development has been welcomed by many Nigerians, marketers have expressed mixed reactions. Some industry players revealed that those who purchased fuel at the previous rate just before the announcement now face substantial losses, as they are forced to sell below cost to remain competitive.
Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, described the price cut as a double-edged sword. While acknowledging its benefits for consumers, he noted that marketers who recently procured fuel at the higher price would struggle to recover their investments. “For instance, a marketer who bought products on Friday would not have sold them all before the reduction was announced. Now, they have to sell at a lower price, leading to financial losses,” Fashola stated.
He further explained that in a deregulated market, marketers have no choice but to adjust their prices accordingly to remain competitive. “If one marketer lowers prices due to new supplies at ₦890 per litre, those still holding stock at ₦950 per litre will have no buyers unless they reduce their prices as well,” he added.
Fashola also noted that the price reduction might have been a response to market forces, particularly warnings from fuel importers who had considered bypassing locally refined PMS in favor of cheaper imported alternatives. “Some importers were threatening to flood the market with cheaper imported fuel. Dangote is simply reacting to that pressure,” he said.
Meanwhile, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, expressed optimism that the Nigerian National Petroleum Company Limited (NNPC) and other marketers might follow suit. “There is an evident possibility that NNPC will reduce its price too. This price reduction benefits citizens by lowering the cost of living, reducing transportation costs, and stimulating economic activity,” he remarked.
The development has also raised concerns about potential losses among marketers who operate on bank loans. National Publicity Secretary of IPMAN, Chinedu Ukadike, recalled that a similar situation occurred when Dangote Refinery entered the diesel market in early 2024, leading to price crashes that forced traders to sell at losses. “Marketers fear lifting products now because price fluctuations expose them to heavy losses,” he said.
Despite the concerns, industry stakeholders acknowledge that price competition is a natural outcome of market deregulation. As fuel prices continue to fluctuate, both major refiners and independent marketers will have to navigate the evolving landscape to sustain their businesses.
