The price war in the downstream oil sector continued on Thursday as the Dangote Petroleum Refinery quietly implemented a price reduction at its loading gantry, reducing the loading cost of its petrol from N825 per litre to N815 per litre.
It was gathered that the new pricing structure introduced on Thursday was met with enthusiasm by oil marketers, who, as a result, opted to bypass private depot owners and begin sourcing their products directly from the refinery.
This N10 price reduction is also anticipated to prompt a competitive reaction from private fuel depots, which may adjust their prices downward to maintain their market position.
Recall that on Tuesday, it was exclusively reported that the landing cost of petrol imported into Nigeria dropped to N774.72 per litre, with marketers predicting that the continued price plunge may lead to a reduction in the pump prices of PMS to about N800 per litre.
Dealers said the N774.72 per litre landing cost, which factors in various expenses, including shipping, import duties, and exchange rates, was a considerable reduction of N50.28 from the previous N825 per litre offered at the loading gantry of the Dangote Petroleum Refinery.
The situation, according to industry stakeholders, ignited a price war, with retail marketers opting to dump the refinery products for imported products on the basis 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
