Economy

Retail Fuel Prices Unlikely to Drop Immediately After Dangote’s N890/Litre Cut

Despite Dangote Refinery’s decision to reduce its ex-depot price of Premium Motor Spirit (PMS) from N950 to N890 per litre, the anticipated decline in pump prices may not take effect immediately, according to the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN).

The National President of PETROAN, Billy Gillis-Harry, acknowledged the significance of the price reduction but highlighted the challenges of implementing immediate retail price adjustments across filling stations nationwide.

“Price changes are not usually instantly applicable, but ultimately it will apply. You can’t see it immediately, because we have already bought products, we have already purchased different kinds of products in our retail outlets at the price it was prior to the changes made,” he said.

Market Realities Delay Price Adjustments

Filling station operators still hold old stock purchased at the previous higher price, making it difficult to reduce pump prices immediately. Industry experts note that retail price reductions will only take effect gradually as new supplies purchased at the lower ex-depot rate reach the market.

Dangote Refinery had announced the price cut on Saturday, February 1, 2025, attributing the adjustment to positive developments in global energy markets and a decline in international crude oil prices.

“As part of Dangote Refinery’s unwavering commitment to transparency and fairness, this price revision reflects the ongoing fluctuations in global crude oil markets, as highlighted in the refinery’s statement on 19th January, when a modest increase was implemented due to the previously rising international crude oil prices.

“In addition, Dangote Petroleum Refinery calls upon marketers to collaborate in this effort, to ensure that these benefits are passed on to the Nigerian populace.

This collective initiative will contribute to the wider economic recovery plan led by His Excellency, President Bola Ahmed Tinubu, who is dedicated to making Nigeria self-sufficient in refined petroleum products and positioning the country as a leading oil export hub,” the refinery stated.

While the Dangote Refinery expressed confidence that the new pricing structure would lead to lower fuel costs and ease the cost of living, PETROAN has urged marketers to ensure the benefits of the reduction reach consumers.

Competition Among Refineries Expected to Lower Prices

Meanwhile, PETROAN has confirmed that its members have started loading petroleum products from the Port Harcourt and Warri refineries, marking a significant shift in local refining capacity.

In a statement at the weekend, PETROAN’s spokesman, Joseph Obele, said the development dispels doubts over the Nigerian National Petroleum Company Limited (NNPC) refineries’ operational status.

“PETROAN members are now loading petroleum products, including Dual-Purpose Kerosene, Automotive Gas Oil, and Premium Motor Spirits,” he said.

“The resurgence of these refineries has sparked intense competition, expected to drive down petroleum prices.

“As Nigerians advocate for lower PMS prices, it is clear that competition is a crucial factor in triggering price reductions.

“The refineries’ revitalisation has brought numerous benefits, including the eradication of adulterated diesel and kerosene from the market.”

According to industry analysts, as more domestic refining capacity comes online and distributors adjust to the new pricing structure, fuel prices are expected to decline in the coming weeks. However, marketers will first clear existing stock before passing on cost reductions to consumers.

While PETROAN has urged its members to align pump prices with the new ex-depot rate, the association also stressed the need for policy consistency and stakeholder collaboration to ensure sustained price stability in the downstream petroleum sector.

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