Marketers May Dump Dangote Fuel as Imported Petrol Costs N922/Litre

The recent drop in the landing cost of Premium Motor Spirit (PMS) to N922.65 per litre has sparked renewed interest among oil marketers in importing petrol, raising questions about the dominance of Dangote Petroleum Refinery in the Nigerian market.

Industry dealers disclosed that the landing cost—which includes shipping, import duties, and exchange rates—represents a reduction of N32.35 compared to the N955 per litre offered by the Dangote Refinery. This price difference is likely to encourage marketers to pursue imports, creating competitive pressure on the refinery.

“The lower cost of imported petrol is often an incentive to dealers, and you won’t blame marketers who import the product,” a source within the sector revealed.

The Dangote Refinery recently justified its petrol price hike from N899.50 to N955 per litre, attributing the increase to rising crude oil prices. However, the recent decline in landing costs signals relief from global market fluctuations, providing an opportunity for marketers to source cheaper products.

Despite this development, petrol prices at retail outlets remain high, with major marketers selling between N990 and N1,010 per litre in Abuja and other areas.

Data from the Major Energies Marketers Association of Nigeria revealed a 2.2 per cent drop in the estimated on-spot import parity price into tanks, from N943.75 per litre on Thursday to N922.65 on Friday. However, the average 30-day cost rose slightly to N939.52 per litre.

Brent crude prices also saw a minor drop, trading at $78.29 per barrel on Friday, with the naira-dollar exchange rate pegged at N1,550.

Industry insiders noted that the price reductions at loading depots varied across locations. For instance, Nipco reduced its price to N970 per litre, while Aiteo and Sahara both closed the week at N960 per litre. Depots in Port Harcourt, Delta, and Calabar recorded prices between N972 and N990 per litre.

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Meanwhile, oil marketers reportedly imported 76.84 million litres of petrol over two days last week. Data from the Nigerian Port Authority showed vessels containing 57,301 metric tonnes of fuel arriving at Apapa and Tincan ports in Lagos, handled by Tera Shipping Limited and Peak Shipping Agency Nigeria Limited.

This surge in imports comes amid conflicting positions within the industry. The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria, Billy Gillis-Harry, expressed surprise, citing an agreement to halt petrol imports for 180 days to allow the Dangote Refinery to prove its production capacity.

“There was supposed to be no importation during this period. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) was expected to enforce this,” Gillis-Harry stated.

However, Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, clarified that the non-import directive was merely a mutual understanding and not a binding agreement.

“There was no formal agreement. It was a mutual understanding because Dangote’s prices were cheaper at the time. But if imported fuel offers a lower cost, marketers will naturally gravitate towards it,” Ukadike explained.

The latest developments suggest growing competition in the downstream sector, as marketers weigh their options between locally refined products and imported alternatives.