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Dangote Refineries engineers new price, lowers cost of petrol per litre.
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Competition sets in as price war rages between Dangote Refineries and Nigeria National Petroleum Company Limited.
The price drop in premium motor spirit(petrol) from #825 to #815 by Dangote Refineries ex-depot has caused a significant impact on the petroleum market.
This reduction came as the landing cost of fuel dropped to N774.82 per litre which is a considerable decrease of N50.28 from the previous N825 per litre offered at the loading gantry of the Dangote Petroleum Refinery.
Daily Report Nigeria gathered that the new price introduced in the market was met with enthusiasm by oil marketers, who bypassed private depot owners and started sourcing their products directly from the Dangote refinery.
Confirming the validity of the news, Daily Report uncovered that while Dangote Refineries officially announced the February 26, petrol price reduction, this new pricing structure was not publicly announced but was quietly implemented.
This spurs the belief that there are ongoing price war between major players in Nigeria’s downstream oil sector especially between Dangote Refinery and Nigerian National Petroleum Company Limited have engaged in a price war.
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Therefore, the N10 price reduction is expected to prompt a reaction from private fuel depots, which may likely adjust their prices downward to remain competitive in their market position.
Also, there are speculations from the Independent Petroleum Marketers Association of Nigeria (IPMAN) that this decline might push fuel prices to about N800 per liter.
Speaking to Newsman, the Spokesperson of IPMAN, Chinedu Ukadike confirmed this by saying:
“It is true. There is speculation that the price of imported products is now lower. That is the reason for the price war.
“It is the beauty of deregulation. Dangote has millions of litres and would not want any external force to take its market share. So it would have forced the price reduction”
However, it has not yet been confirmed if the price reduction by Dangote Refinery would influence the retail price sold at its filling stations like MRS, which still sells N860 per litre in Lagos and N880 in Abuja.
Meanwhile reports from PunchOnline analysis showed that AA RANO depot left its loading cost price unchanged at N830 per litre. MENJ Depot also left its own at N830. Bovas depot sold its products at N826, WOSBAB gave its customers a price estimate of N831, while AITEO gave a price of N827 from N832 charged earlier this week. Integrated depot sold at N826 and RAINOIL depot sold its products at N831 per litre.
This price war among refineries might be to the benefit of end users as both the price of crude oil and market forces are factors influencing Petrol prices.
