Despite the ex-depot petrol price reduction by the Dangote Petroleum Refinery on Monday, many marketers have refused to adjust their pump prices, saying they could run into losses.
The marketers, on Tuesday, stated that dropping their pump prices would not be possible unless they exhaust the product purchased at prices around ₦900 per litre.
On Monday, the Dangote refinery had reduced the ex-depot petrol price from ₦880 to ₦840 per litre. The spokesman of the Dangote Group, Anthony Chiejina, confirmed this.
Chiejina stated that the price reduction took effect on June 30. “PMS price has been reduced from N880 to N840 per litre effective 30th June,” he said.
The Dangote Refinery jerked up the price of petrol to ₦880 as tension escalated during the 12-day conflict between Israel and Iran, raising the price of crude oil to almost $80 per barrel.
Marketers had on Sunday anticipated that there would be a new price regime from Monday. As of Tuesday, other depot owners and importers adjusted their prices to reflect the new price regime occasioned by the drop in crude prices following the ceasefire between Israel and Iran.
Down from ₦920, most of the depots dropped their gantry prices to an average of ₦845 a litre. According to Petroleumprice.ng, RainOil, Pinnacle, Matrix, Emadeb, Wosbab and First Royal were selling petrol at ₦845 in Lagos on Tuesday.
Similarly, NIPCO, Aipec and integrated sold premium motor spirit at ₦850 per litre. In other depots outside Lagos, such as Warri and Port Harcourt, the product was sold at an average of ₦860.
As the Dangote refinery removed ₦40 from its gantry price, Nigerians expected that this would be replicated by filling stations but the price remained the same.
As Dangote partners such as MRS, Heyden and AP have yet to call the shots, it is observed that other filling stations may not change their pump prices. Filling stations dispensed petrol at an average of ₦920 to ₦935 in Ogun and other parts of the South West yesterday.
Retail outlets owned by the Nigerian National Petroleum Company Limited (NNPC) have also yet to change their pump prices as of the time of filing this report. NNPC stations sold petrol at ₦915 in Lagos and ₦925 in Ogun State.
Experts observed that the pump price of PMS should shrink to ₦890 or less with Dangote’s ₦840 gantry price. However, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, said prices have yet to come down because traders were still grappling with old stocks.
When told that the filling stations’ prices were not coming down despite the drop in the ex-depot prices, Gillis-Harry replied, “How will it come down? How will the price come down at the pump? If you, as a Nigerian businessman, bought fuel at N920 and the price came down to N840, what would you do with the change? Multiply N80 by 45,000 litres, how much is that? So, are you going to throw that away? No, that’s not possible.”
The PETROAN president stated that there may not be an immediate price cut until the existing fuel in filling stations was exhausted. According to him, a retailer who loses about ₦100 per litre from a 45,000-litre stock would not be able to restock.
“We need to exhaust existing stocks. All existing stocks must be sold out first. That is the right business thing to do because if a retail outlet owner loses N100 per litre, and he has to go back to the market to restock, he won’t be able to restock,” he stated.
Gillis-Harry, however, noted that there could be challenges and the pressure to cut prices below cost when those who get the stocks at the new price divert customers from those selling at the old price.
The PUNCH