KEY POINTS

• The refined products from Dangote Refinery now sell at N890 per liter rather than their previous price of N950 per liter.
• Statistics show that fuel providers remain apprehensive about potential earnings so they advise customers to exercise caution in buying gasoline at current prices.
• The price adjustment from NNPC and other suppliers becomes likely to impact their current pricing strategies.

A swift decision made by Dangote Petroleum Refinery to lower Premium Motor Spirit (PMS) ex-depot prices from N950 to N890 per liter produces different reactions from petroleum marketers.

Marketers who bought fuel at elevated rates experience substantial financial setbacks after Dangote Petroleum Refinery implemented its price reduction to consumers.

The decrease in ex-depot Premium Motor Spirit price from N950 to N890 seems to stem from traders threatening to start importing less expensive fuel.

The market action has accelerated competitive pressure that compounds the Nigerian National Petroleum Company Limited (NNPC) and other participating suppliers to minimize their selling prices.

Deregulated fuel market dynamics

The Independent Petroleum Marketers Association of Nigeria (IPMAN) reports that Vice President Hammed Fashola describes how recent fuel buyers now need to sell at lower prices while taking losses.

According to him the price fluctuations are an unavoidable part of market deregulation.

The price cut welcomed by Billy Gillis-Harry as President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) promotes economic growth and transportation affordability.

Other market participants are expected to match this pricing strategy by the exporter which will lead to lower fuel prices for all customers.