Why Marketers refused to adjust Fuel Prices despite Dangote’s N40 reduction

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Despite the Dangote Petroleum Refinery’s reduction of petrol prices from N880 to N840 per litre, many marketers have refused to adjust their pump prices, citing potential losses. According to the marketers, they cannot drop their prices until they exhaust their existing stocks purchased at higher prices.

“We need to exhaust existing stocks. All existing stocks must be sold out first. That is the right business thing to do,” said Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria.

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Gillis-Harry explained that retailers who bought fuel at higher prices would incur significant losses if they reduced their prices. “If you, as a Nigerian businessman, bought fuel at N920 and the price came down to N840, what would you do with the change? Multiply N80 by 45,000 litres, how much is that? So, are you going to throw that away? No, that’s not possible.

The PETROAN president noted that prices may not come down immediately, but rather when existing stocks are depleted. He also expressed concerns about frequent price changes and called for a more stable pricing regime. “These changes in prices need to be checked; they need to be justified.”

Meanwhile, other depot owners and importers have adjusted their prices to reflect the new price regime, with most selling petrol at an average of N845 per litre. However, filling stations have yet to change their pump prices, with prices ranging from N920 to N935 in some areas.

Dangote Refinery has reduced its premium motor spirit (PMS) ex-depot price from N880 to N840 per litre, a decrease of N40 per litre. This move is expected to trigger a nationwide reduction in fuel prices. The Independent Petroleum Marketers Association of Nigeria (IPMAN) has confirmed the price cut and plans to hold an emergency meeting to review retail pump prices across the country.

According to Abubakar Maigandi, President of IPMAN, the association’s members will implement the new price once they load new products. “We will be meeting on Tuesday to review our PMS prices following the latest petrol reduction announced by Dangote. Certainly, the petrol price will come down from tomorrow,” Maigandi said.

The price reduction is attributed to the de-escalation of the conflict between Israel and Iran, which led to a downward trend in global oil prices. Brent crude now trades at $67.81 per barrel, while West Texas Intermediate stands at $64.97.

As of Monday evening, fuel prices at filling stations in Lagos and Abuja ranged between N875 and N970 per litre. Major outlets such as MRS, AA Rano, Shafa, Mobil, Eterna, and AP Ardova sold petrol for about N945 per litre, while others like Ranoil and Empire priced theirs between N950 and N970.

However, marketers have refused to adjust their pump prices, citing potential losses. They claim they need to exhaust their existing stocks purchased at higher prices before implementing the new price. “We need to exhaust existing stocks. All existing stocks must be sold out first. That is the right business thing to do,” said Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria

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