The ongoing price competition in the downstream oil sector intensified on Thursday as the Dangote Petroleum Refinery discreetly lowered its prices at the loading gantry, reducing the cost of petrol from N825 to N815 per litre.
This new pricing strategy, introduced on Thursday, was warmly received by oil marketers, who subsequently chose to bypass private depot operators and procure their supplies directly from the refinery.
The N10 price cut is expected to trigger a competitive response from private fuel depots, potentially leading them to decrease their prices in order to retain their market share.
Industry sources reported that the landing cost of petrol, which encompasses expenses such as shipping, import duties, and exchange rates, dropped significantly to N774.72 per litre—a notable reduction of N50.28 from the previous rate of N825 per litre at the Dangote Petroleum Refinery’s loading gantry.
This development, according to market participants, has sparked a price war, prompting retail marketers to shift their focus from the refinery’s products to imported alternatives, driven by the appeal of lower pricing.
“Crude oil is a major component in the production of fuel, so a further reduction in its price would definitely warrant a drop in petrol price, and it is possible to drop to N800 per litre,” the National Publicity Secretary of the Independent Marketers Association of Nigeria, Chief Ukadike Chinedu, stated.
But in a fresh effort to control market share, the 650,000 barrels per day capacity refinery reduced its loading cost to N815 per litre on Thursday.
When added to the N10 levy charged by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, this will increase the cost to N825 per litre
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