Relief As Dangote Refinery Reduces Diesel Prices by N100 Again
- Dangote Refinery has reduced its diesel gantry price by N100 as depots reduce rates to attract customers
- Data shows that several depots have reduced their prices amid a decline in crude oil prices
- The refinery’s latest cut reflects growing pressure in the deregulated market and rising competition
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
Dangote Refinery has cut its Automotive Gas Oil (AGO) or diesel gantry price by N100 to N1,500 per litre, its second price reduction in a week, following intensified pressure in Nigeria’s downstream market.
The price of the commodity decreased by 6.25% to N1,500 from the prior N1,600 a litre quoted in what is the second downward adjustment since last week, a day after Tuesday's price cut to N1,600 per litre.
Source: Getty Images
Dangote refinery diesel price
The price adjustment comes as diesel prices are trading weaker across depots in Lagos due to increased competition among marketers, pushing prices down as traders scramble to dispose of existing stock against potential drops.
Already, depot prices indicate several marketers are transacting below N1,600 a litre.
Petroluemprice.ng reports that sales on average range between N1,565 and N1,570 a litre across multiple depots, depending on stock levels, cash position of traders and other market dynamics.
Industry participants attributed recent diesel price falls to rising competition and "panic selling," among other sources, citing a quick stock turnover rather than building a wide price spread.
Dangote's action is in line with recent market forces that have led to private depot prices of the commodity falling below the company's gantry benchmark.
A company official said
"We will continue to adjust our prices down if private depots keep dropping below our benchmark and the competitive structure of the market drives prices lower. For the deregulated market, supply and demand dictates the direction."
Source: UGC
Crude oil price drops
The development comes on the back of softening global crude oil prices, as Brent crude is down 0.40 per cent to $79.53 per barrel by 10:00WAT, and West Texas Intermediate (WTI) crude has eased 0.03% to $75.83 per barrel.
The decline is expected to bring succour to manufacturers and transport companies, which have a high reliance on the product, as lower diesel costs could help reduce operational expenses, improve profit margins, and ease pressure from rising production and logistics costs.
Aviation fuel price drops in Nigeria
Earlier, Legit.ng reported that Dangote has also reduced the price of Aviation Turbine Kerosene (ATK), commonly known as jet fuel, in a move that could ease pressure on airline operating costs in Nigeria.
Market data showed that jet fuel price was cut by N100 per litre, from N1,550 to N1,450, representing a 6.5 per cent decline. The adjustment reflects recent movements in crude oil prices and improving global supply conditions.
Airlines are grappling with high operational expenses, with jet fuel remaining one of the biggest cost drivers in the aviation sector.
Source: Legit.ng
