Oil marketers in Nigeria are reportedly exploring a shift from the Dangote Petroleum Refinery to imported Premium Motor Spirit (PMS) as the landing cost of imported petrol dropped to N922.65 per litre as of Friday, January 24, 2025. This development comes as imported petrol now appears more cost-effective than the N955 per litre ex-depot price offered at the Dangote Refinery’s loading gantry.
According to industry sources, the reduction in landing cost, driven by lower global crude oil prices and adjustments in shipping and exchange rates, represents a N32.35 difference, providing marketers with a significant incentive to return to imports.
A major oil marketer, speaking anonymously, stated, “The lower cost of imported petrol is often an incentive to dealers. You can’t blame marketers who choose to import when the price is favorable.”
The Dangote Refinery had recently attributed its price increase, from N899.50 to N955 per litre, to a surge in crude oil costs. However, with Brent crude benchmarked at $78.29 per barrel and the exchange rate at N1,550 per dollar, importers are finding it more profitable to source petrol abroad.
Despite the lower landing cost, petrol prices in Nigeria remain high. Retail outlets in the Federal Capital Territory sell petrol between N990 and N1,010 per litre, even as some marketers reduced their prices slightly last week.
The latest report from the Major Energy Marketers Association of Nigeria (MEMAN) revealed that the 30-day average landing cost of petrol rose to N939.52 per litre on Friday, compared to N929.07 earlier in the week. Meanwhile, depot prices showed slight reductions, with companies such as Nipco, Aiteo, Sahara, and Swift closing the week between N960 and N970 per litre.
Additionally, data from the Nigerian Ports Authority confirmed the importation of 76.84 million litres of petrol in just two days, with vessels berthed at the Apapa and Tin Can ports in Lagos.
However, the decision to import petrol appears to contradict an earlier “non-import agreement” aimed at giving the Dangote Refinery 180 days to prove its production capacity. Billy Gillis-Harry, National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, expressed surprise at the imports, stating, “The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) was supposed to stop import licenses during this period.”
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, clarified that the so-called agreement was a “mutual understanding” rather than a binding directive. “At the time, Dangote products were cheaper than imported ones, but now marketers are pursuing cost-effective options,” he said.
The evolving dynamics in the downstream oil sector underscore the persistent impact of global market forces, exchange rate fluctuations, and freight costs on Nigeria’s energy landscape. Stakeholders will be closely monitoring these developments to assess their implications for the market and the Dangote Refinery’s role in stabilizing fuel supply.
