Petrol Marketers Take Bold Step To Curb Losses As Dangote, NNPCL Continue To Reduce Fuel Prices

• Dangote Refinery has reduced fuel prices to N875 per litre at retail outlets, causing a major challenge for independent marketers
• The Nigerian National Petroleum Corporation Limited (NNPCL) has also slashed prices down to N870 per litre in its outlets
• To address the challenges arising from these unexpected price cuts, the independent marketers have now announced a new strategy to curb losses

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

As fuel prices continue to fluctuate in Nigeria, petrol retailers and marketers have taken a bold step to curb the losses they suffer.

In the last couple of months, Dangote Refinery has reduced fuel prices several times, with the latest move taking the price down to N875 per litre.

The refinery went a step further by offering refunds to its partners to ensure that the price reduction is immediately reflected in pump prices.

Filling stations belonging to Ardova Plc, MRS, TechnoOil, Hyde, Optima Energy, and Heyden can now sell the product at the new price.

The Nigerian National Petroleum Corporation Limited (NNPCL) has also been part of the price war, slashing prices down to N870 at the pump.

Petrol marketers and others who purchase from other sources have struggled to minimise losses with the unpredictable price cuts and have now moved to forge strategic alliances.

Marketers unite to minimise losses

In a bid to safeguard their businesses from the ongoing price war, the marketers are now forming alliances with new strategies to minimise the increasing losses.

The Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Mr. Chinedu Ukadike, stated that while the deregulation of the downstream sector has offered consumers several options, it has also come with its challenges for the independent marketers.

He said the new strategy marketers are adopting is to reduce purchase quantities to improve turnover rates.

According to the SUN news, Ukadike explained that instead of one marketer purchasing a truckload of 45,000 litres, two or more can pool resources to share the truck.

This strategy reduces the number of days required to sell off the supply so that they can make new purchases at current prices.

According to him:

“This is the era where you buy what you can quickly sell and make do with the little margin before returning to make fresh orders. If you decide to buy in larger quantities now, I can assure you that the marketer would run into massive losses, because before you finish selling that volume, the bigger players might have slashed prices.”

Recall that the marketers earlier appealed to regulators to prevent the Dangote refinery and NNPCL from arbitrarily slashing fuel prices.

Dangote Refinery confirms Nigeria's fuel is 55% cheaper

In related news, Dangote Refinery has confirmed that Nigeria has some of the cheapest fuel prices in West Africa.

Legit.ng reported that the President of the Dangote Group, Aliko Dangote, said this while hosting the President of the ECOWAS Commission.

Dangote stated that the fuel prices paid in Nigeria are at least 55% cheaper than the average price of fuel across West Africa.

Source: Legit.ng