Relief for Nigerians As Petrol Prices Fall at Depots Nationwide
- Wholesale petrol and diesel prices in Calabar, Port Harcourt, Warri, and Lagos dropped below Nigeria's current estimated landing costs
- Dangote Refinery suspended product supply to Lagos amid rising petrol imports, redirecting supply to other regions
- Rising global crude prices pushed the landing cost of petrol to N1,420 per litre and diesel to N1,894 per litre
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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.
Petrol and diesel prices on Tuesday, September 15, were below current landing costs in several major markets, despite a surge in global crude oil prices.
Brent crude was trading at $108.60 per barrel as of 7:50 a.m. West Africa Time, a 2.79% rise, while U.S. West Texas Intermediate crude climbed 4.42% to $105.90 per barrel.
Source: Getty Images
The increase pushed Nigeria's estimated landing cost for Premium Motor Spirit (PMS) to N1,420 per litre and Automotive Gas Oil (AGO) to N1,894 per litre.
Despite this, Dangote Petroleum Refinery is selling PMS at N1,350 per litre at the gantry, which is N70 below the current landing cost, while its AGO gantry price of N1,850 per litre sits N44 below the diesel landing cost.
Petrol below N1,350 in key markets
In Calabar, depot operators are selling PMS even lower than Dangote's gantry price.
Mainland is offering petrol at N1,347 per litre, while Northwest and Soroman are pricing it at N1,345 and N1,346 per litre, respectively.
These figures are between N73 and N75 below the current landing cost.
Port Harcourt tells a similar story, with Masters and Liquid Bulk selling PMS at N1,350 per litre and TSL at N1,347.
In Warri, Nepal and Keonamex are also offering petrol at N1,350 per litre.
Diesel cheaper than replacement cost
The diesel market reflects a comparable trend.
Petroleumprice.ng reports that in Lagos, African Terminal, Integrated, Duport and Ibachem are all offering AGO at N1,830 per litre, which is N64 below the current landing cost and N20 below Dangote Refinery's gantry price.
Market participants say the lower prices are partly the result of traders selling stock purchased earlier when crude prices and replacement costs were lower.
Those traders can sell today's replacement cost below while still making a profit because their inventory was acquired more cheaply.
Industry sources described this as a growing distortion in the wholesale market, with bulk buyers holding earlier inventories capturing a larger share of trading activity.
Source: Getty Images
Dangote supply shift behind regional drop
The lower wholesale prices in Calabar, Port Harcourt and Warri are also linked to a supply shift by Dangote Refinery.
According to market sources, the refinery suspended product supply to Lagos following a rise in petrol imports and redirected more of its output to other regions.
The increased supply in those markets has intensified competition among depot operators, driving prices down further.
NNPC offers N5,000 free fuel
Earlier, Legit.ng reported that the Nigerian National Petroleum Company Limited (NNPCL) has opened its Bill Clinton Drive Mega Station on Airport Road in Abuja.
To mark the occasion, the company offered customers who bought fuel at the new station N5,000 worth of free petrol, subject to stock availability.
The promotion was designed to draw motorists to the newly opened facility, which expands NNPC Retail's presence in the capital.
Proofreading by James Ojo, copy editor at Legit.ng.
Source: Legit.ng
