Breakthrough in Nigeria’s Petroleum Sector: Dangote Refinery’s Price Reduction Set to Trigger Nationwide Drop in Petrol Prices
In a move that is poised to send shockwaves throughout Nigeria’s petroleum industry, Dangote Refinery has implemented a significant reduction in its ex-depot price for premium motor spirit (PMS), commonly known as petrol. The price cut, which took effect on Monday, is expected to lead to a nationwide decrease in petrol prices at filling stations across the country.
According to reports, the 650,000 barrels per day refinery, located in Lekki, Lagos State, offered customers a N10 refund on PMS bought at N835 per litre. This development was confirmed by Billy Gillis-Harry, National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, and James Tor, National Secretary of the Independent Petroleum Products Marketers Association of Nigeria.
The implications of this price reduction are far-reaching, with partnering filling stations such as MRS, AP (Ardova), Heyden, Optima Energy, Hyde, and Techno Oil expected to adjust their petrol pumps in the coming days. Currently, MRS and other partnering filling stations sell petrol at N910 per litre, but a staff member at an MRS filling station in Abuja revealed that the outlet plans to reduce its price to N900 per litre by Wednesday or Thursday.
Industry experts believe that this price reduction will have a ripple effect across the market, with other players likely to follow suit. "Our members are used to price reduction; this is because the prices of premium motor spirits are determined by market forces since we have accepted deregulation of the sector," explained James Tor. He added that the partnership between NNPCL’s new management and the Dangote Group would stabilize the country’s petrol market, providing a sense of direction for the industry.
However, not everyone is pleased with the frequent price fluctuations. PETROAN’s president, Billy Gillis-Harry, lamented the instability caused by Dangote Refinery’s incessant price cuts, stating that the constant up-and-down movement of petrol prices needs to be addressed. He emphasized the importance of allowing market forces to determine prices, rather than relying on artificial interventions.
The price reduction comes as the global price of crude oil continues to decline, with Brent and WTI crude blends falling to $64.72 and $61.72, respectively, as of Tuesday morning. This development is seen as a positive step towards making energy more accessible and affordable for Nigerians.
As the Nigerian petroleum industry continues to evolve, one thing is clear: the recent price reduction by Dangote Refinery is set to have a significant impact on the market. With the potential for further price reductions on the horizon, consumers can expect a more stable and competitive petrol market in the days to come.
