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The landing cost of Premium Motor Spirit (petrol) has now averaged N870 per litre, reports by the Major Energies Marketers Association of Nigeria have shown.
This is even as the price offered by the Dangote Petroleum Refinery threatened the margins of fuel importers and marketers alike. According to MEMAN, the landing cost of petrol was N872 per litre on April 28 and N868 as of April 29.
On April 23, the landing cost averaged N859 per litre, indicating that the cost of importing petrol has now risen above Dangote refinery’s announced ex-depot price of petrol of N835 per litre. With the landing cost rising, importers of petroleum products seem to be having challenges selling their products at profitable rates.
According to petroleumprice.ng, Dangote sold petrol at N840 on Thursday, the same price as Matrix (Lagos) and Rainoil. Pinnacle, Mao, Sahara, AA Rano sold the product at N889 while Aiteo and Aipec offered PMS fuel for N838.
First Fortune’s price was N868; Sigmund, N875; Liquid Bulk, N870; Matrix (Warri), N870; NIPCO Lagos, N842.
Our correspondent observed that the prices vary based on the location. While prices are lower in Lagos depots, those buying from the South-South pay more due to logistics.
In an interview with our correspondent, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN) Billy Gillis-Harry, said business has been slow due to incessant price fluctuations.
He said the fluctuation led to arbitrary changes not well managed.
“Business has been very slow, with the up and down price of PMS from arbitrary changes that are not effectively managed by the market forces,” he said.
Nevertheless, the PETROAN president said he and his members were trying to provide energy access to Nigerians despite the challenges.
“Regardless of how things are, we have to do business and keep Nigeria’s economy growing. That’s our covenant with Nigeria. That’s PETROAN’s covenant,” he stated.
Gillis-Harry maintained that the government is doing its best, “and I think that we will get to the point where business will be beneficial to the consumers and those of us in the business.”
Meanwhile, the SGR filling station in the Sagamu and Mowe axis of Ogun has dropped the price of PMS to N855 per litre. With over six stations along the Sagamu-Benin and the Lagos-Ibadan Expressways, SGR is selling PMS below the rates displayed by Dangote partners.
In Ogun, MRS sells petrol at N890 per litre while Heyden sells it at N885 as of Thursday. Recall that the Dangote refinery has consistently slashed the prices of petrol since the Federal Government began the naira-for-crude deal with the facility.
Importers of petroleum, as well as PETROAN, complained that the price cuts were impacting their businesses negatively. The traders told our correspondent that they were forced to sell below their costs in order not to incur too many losses.
With the temporary suspension of the naira-for-crude deal in March and Dangote’s stoppage of naira fuel sales, importers did not hesitate to raise PMS prices from N860 to N950.
However, as the Federal Government ordered that the deal should continue indefinitely, Dangote lowered petrol prices below N900 per litre.
But a report by S&P Global said the pricing of refined petroleum products at the Dangote Petroleum Refinery has been identified as one of the incentives to import fuel into Nigeria.
S&P Global said the Dangote refinery’s reduction in petroleum products’ prices was not significant compared to the global fall in prices.
It stated that the 650,000 barrels-per-day capacity refinery did not lower its gantry prices significantly, thereby incentivising fuel imports.
“Incentives to ship products to West Africa have also come from the pricing at Nigeria’s Dangote refinery. While flat prices have been driven down massively amid falling crude prices, Dangote has not lowered gantry prices for truck volumes significantly.
“Between April 1 and April 9, the Eurobob M1 swap fell from $734.25 per metric tonne to $603/MT, a 17.9 per cent fall, before recovering somewhat. But over the same period, Dangote’s truck price at the gantry dropped just 1.7 per cent from N880/litre to N865/litre (and later N835).
“This has encouraged a flood of products to West Africa, where high domestic prices have led marketers to import from international traders in greater volumes,” the report said.
