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Key players in Nigeria’s downstream petroleum sector, including Dangote Refinery, depot operators and fuel marketers, have agreed to pursue additional reductions in the price of Premium Motor Spirit (PMS) following a meeting with the Federal Government.

ZINGTIE had earlier reported that the Federal Government urged Dangote Refinery, depot owners and petroleum marketers to further reduce fuel prices in response to the continued decline in global crude oil prices.

The position was presented during a stakeholders’ meeting convened by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), with representatives of Dangote Refinery, depot operators and petroleum marketers in attendance.

The Federal Government also reminded refiners and marketers of the need to maintain cost-reflective pricing in line with the current Brent crude benchmark of about $72 per barrel, despite recent tensions in the Middle East.

The Chief Executive of NMDPRA, Rabiu Umar, reiterated during the meeting in Abuja that petrol and other petroleum products should witness further price adjustments.

Speaking further on the outcome of the meeting, the President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, and the President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Abubakar Maigandi, separately confirmed to ZINGTIE that additional reductions in petrol prices are expected nationwide.

Both industry leaders noted that if international crude oil prices continue their downward trend, the pump price of petrol could fall to around N1,000 per litre or even lower.

Gillis-Harry explained that the current pump prices of between N1,150 and N1,299 per litre in Abuja and surrounding areas are expected to decline further.

He stated that all major stakeholders within the downstream petroleum industry are committed to ensuring that fuel prices become more affordable.

However, he stressed that no marketer can be expected to sell petrol below cost price.

Sharing details of the meeting, Gillis-Harry said discussions focused on practical measures aimed at making petrol cheaper for consumers across the country.

“You can quote us that PETROAN is willing to work with the NMDPRA, the Federal FCCPC, the minister of petroleum, and all stakeholders to ensure that price reduction is implemented for the benefit of Nigerians.

“However, nobody is going to be running a business at a loss, and then, you know, basically what that means is that’s the close of business,” he said.

He pointed out that fuel pricing is still largely influenced by developments in the international market, making it difficult to determine a fixed pump price.

“The true cost-reflective price is still determined internationally. That’s the reality,” Gillis-Harry said.

He noted that the variables affecting pricing continue to change, making any fixed projection unrealistic.

“It’s not easy to work things out because the dynamics of the input vary. There’s no time that is static,” he stated.

Why petrol prices have not dropped in direct proportion to crude oil prices

Addressing public expectations that petrol prices should automatically decline whenever crude oil prices fall, Gillis-Harry said the downstream sector is far more complex than many people assume.

“The expectations that are put by Nigerians, ‘Oh, the crude oil has come down to $72, therefore, it must affect us.’ But that is not the reality,” he said.

He explained that crude oil prices remain highly volatile, adding that prices increased significantly even while the meeting was ongoing.

“Even today, as we are sitting there, we were checking the price volatility. Price increased by $7,” he said.

According to him, no single stakeholder has the authority to determine petrol prices independently, noting that the industry is collectively working towards reducing costs.

“We cannot, in reality, make any pronouncements today. Because what we’re trying to do is everybody must take a cut,” he said.

“Every one of us must take a cut. We had earlier issued a press release on this matter, and it hasn’t changed.

“That press release was based on empirical evidence, empirical data, all of which today was very transparently presented.”

Marketers insist business must remain sustainable

Gillis-Harry further argued that government cannot simply dictate pump prices without considering prevailing market realities.

“If you tell us to go and sell at this price, then business is closed. How do Nigerians get fuel overnight?” he asked.

He added that allowing experienced operators to continue running the downstream sector remains essential to maintaining uninterrupted fuel supply.

“So as it is today, prices will come down, we know. But how much it will come down, we cannot say.

“And I don’t think it will be fair for me, for anybody, to make that kind of assumption because it will be just, at best. And assumptions are not facts,” Gillis-Harry said.

He disclosed that refiners, importers and retailers have already begun implementing gradual price reductions.

“You can see Dangote has been reducing. Our retail outlets have been reducing. That’s how we continue to go until the price comes down,” he said.

While expressing optimism that petrol prices would continue to decline, he maintained that the speed of the reductions would depend largely on market conditions.

“It will come down. But how fast and how well is something that we have to keep working on until we get the dynamics of how to make sure that there’s an answer,” he added.

Similarly, IPMAN President Abubakar Maigandi said Dangote Refinery and marketers are expected to continue adjusting prices downward as crude oil prices decline.

He also emphasised that government does not have the power to arbitrarily fix petrol prices for operators within the downstream sector.

“Fuel prices will go down further; that was our major agreement. Both Dangote Refinery and depot owners assured Nigerians.

“But you can say exactly that the fuel price may come down to below N1,000 per liter,” he stated.

ZINGTIE reports that Dangote Refinery, depot operators and filling stations have collectively reduced petrol prices by more than N100 per litre within the last three weeks.

The latest adjustments have pushed pump prices to between N1,150 and N1,299 per litre across Abuja and neighbouring areas.

Over the weekend, the Nigerian National Petroleum Company Limited (NNPCL) also reduced its pump price to N1,150 per litre.

Other outlets, including MRS, AA Rano, Ranoil and NIPCO, currently dispense petrol at prices ranging from N1,191 to N1,240 per litre.

At the time of filing this report, Brent crude traded at about $71 per barrel, while West Texas Intermediate (WTI) stood at approximately $68 per barrel.

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