Wisdom Engraced
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The landing cost of Premium Motor Spirit (PMS) has averaged ₦870 per litre, according to a report by the Major Energies Marketers Association of Nigeria (MEMAN). This development has raised concerns about the profitability of fuel importers and marketers, especially with the Dangote Petroleum Refinery’s price threatening their margins.
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MEMAN reported that the landing cost of petrol was ₦872 per litre on April 28 and ₦868 as of April 29. On April 23, the landing cost averaged ₦859 per litre, indicating a rising trend in the cost of importing petrol. This increase has made it challenging for importers to sell their products at profitable rates, especially with Dangote’s ex-depot price of ₦835 per litre.
According to (link unavailable), Dangote sold petrol at N840 on Thursday, with other marketers offering varying prices. Pinnacle, Mao, Sahara, and AA Rano sold PMS at N889, while Aiteo and Aipec offered it for N838. Prices varied based on location, with Lagos depots offering lower prices compared to the South-South region due to logistics
National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, attributed the slow business to incessant price fluctuations. “Business has been very slow, with the up-and-down price of PMS from arbitrary changes that are not effectively managed by the market forces,” he said.
Despite the challenges, Gillis-Harry emphasised PETROAN’s commitment to providing energy access to Nigerians. “Regardless of how things are, we have to do business and keep Nigeria’s economy growing. That’s our covenant with Nigeria. That’s PETROAN’s covenant,” he stated. He also expressed optimism that the government is working towards creating a beneficial business environment.
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Meanwhile, the SGR filling station in Ogun has dropped the price of PMS to ₦855 per litre, selling below the rates displayed by Dangote partners. In contrast, MRS sells petrol at ₦890 per litre, while Heyden sells it at ₦885 in Ogun.
A report by S&P Global noted that the Dangote refinery’s pricing strategy has incentivised fuel imports into Nigeria. The report stated that the refinery’s reduction in petroleum products’ prices was not significant compared to the global fall in prices, encouraging marketers to import fuel. “Incentives to ship products to West Africa have also come from the pricing at Nigeria’s Dangote refinery,” the report said.
S&P Global added, “While flat prices have been driven down massively amid falling crude prices, Dangote has not lowered gantry prices for truck volumes significantly. Between April 1 and April 9, the Eurobob M1 swap fell from $734.25 per metric tonne to $603/MT, a 17.9 per cent fall, before recovering somewhat. But over the same period, Dangote’s truck price at the gantry dropped just 1.7 per cent from N880/litre to N865/litre (and later N835).”
The report concluded that the disparity in prices has encouraged a flood of products to West Africa, where high domestic prices have led marketers to import from international traders in greater volumes
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Jonathan Nwokpor
