The cost of importing Premium Motor Spirit (PMS), also known as petrol, has increased significantly, with the landing cost now averaging ₦870 per litre, according to the Major Energies Marketers Association of Nigeria.
It is said that the hike comes at a time when the price supplied by the Dangote Petroleum Refinery is causing market friction, affecting both gasoline importers and marketers’ profits.
MEMAN reported a landing cost of ₦872 per liter on April 28 and ₦868 on April 29 for petrol. On April 23, the cost of a litre was ₦859, indicating the escalating expenses of importing petrol.
This spike has caused alarm among importers, who are now unable to sell their products at a profit due to pricing pressure.
Petrol prices vary greatly across the country. Dangote sold petrol for ₦840 on Thursday, matching the prices quoted by Matrix (Lagos) and Rainoil.
Other merchants, including Pinnacle, Mao, Sahara, AA Rano, and NIPCO, offered the fuel at higher prices ranging from ₦889 to ₦842, depending on location.
Retailers in Lagos enjoy lower prices, whilst those in the South-South pay more due to logistics costs. First Fortune charged ₦868 for petrol, while Sigmund and Liquid Bulk set prices at ₦870. In Ogun State, MRS sells petrol at ₦890 a litre, followed by Heyden at ₦885.
Speaking with Punch, Billy Gillis-Harry, the 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,” stated the politician.
Regardless of the obstacles, Gillis-Harry emphasized that PETROAN members are committed to providing Nigerians with access to electricity.
The PETROAN president also noted that the government is working to stabilize the situation, and he is optimistic that the sector’s difficulties would be handled in the long term, benefiting both consumers and companies.
One key contributor to the current scenario is Dangote Petroleum Refinery’s pricing approach. Since the Federal Government’s naira-for-crude agreement with the refinery began, the refinery has routinely reduced petrol prices.
However, Dangote’s price drop has had a detrimental impact on fuel importers, requiring them to sell petrol at rates below their costs in order to avoid incurring too many losses.
Importers increased their rates from ₦860 to ₦950 after the naira-for-crude arrangement was suspended in March. Dangote reduced petrol prices to under ₦900 per liter in response to the Federal Government’s instruction to prolong the offer.
However, according to S&P Global, the pricing of refined petroleum products at Dangote’s refinery has unintentionally encouraged fuel imports into Nigeria.
S&P Global stated that, despite the global decline in crude oil prices, Dangote did not considerably lower its gantry pricing, resulting in additional imports into West Africa.
According to the research, between April 1 and April 9, the Eurobob M1 swap declined from $734.25 per metric tonne to $603/MT, a 17.9% drop, before recovering marginally. Dangote’s truck pricing at the gantry reduced by only 1.7% from ₦880/litre to ₦865/litre (later ₦835) throughout the same time period.
“This has promoted a flow of items into West Africa, where high domestic pricing have driven marketers to import in bigger amounts from overseas traders.
