• Price adjustments driven by stronger naira, falling crude oil prices, says IPMAN
• PETROAN commends NNPC and Dangote for easing financial burdens on Nigerians
Tayo Busayo, Abuja
DAILY COURIER - In a significant move aimed at easing the financial burden on Nigerians and fostering a competitive market environment, the Nigerian National Petroleum Company Limited (NNPC) has reduced the ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol, to N825 per litre from N890 per litre.
This adjustment, confirmed by NNPC’s spokesperson, Olufemi Soneye, comes amid increasing competition in Nigeria’s downstream petroleum sector and follows a similar price reduction by Dangote Refinery earlier this month.
The new ex-depot price translates to a pump price of N860 per litre in Lagos, N870 per litre in the South-West, N880 per litre in the North, and N890 per litre in the South-South and South-East. This marks the second price reduction in February 2025, following a previous decrease of N60 earlier in the month. The NNPC’s decision reflects its commitment to adjusting prices in response to market dynamics, a practice that has become routine since the deregulation of the sector.
Dangote Refinery, which began operations in 2024, has been at the forefront of driving price reductions in the downstream sector. The refinery announced a N65 per litre price cut effective March 1, 2025, as part of its efforts to provide relief to Nigerians, particularly during the ongoing Ramadan season. This move aligns with President Bola Ahmed Tinubu’s economic recovery policy, which seeks to alleviate the financial strain on citizens.
The refinery has consistently lowered petrol prices since its inception. In December 2024, during the Yuletide season, it reduced the price of PMS by N70.50, from N970 to N899.50 per litre, to ease the cost of living for Nigerians. This latest reduction is part of its broader strategy to ensure fair pricing and consumer welfare.
Dangote Refinery has also introduced a refund policy to compensate retail outlet owners who purchased petrol at the previous higher rates. According to the Petroleum Retailers Outlet Owners Association of Nigeria (PETROAN), the refinery will refund N65 per litre for over 200,000 metric tonnes of PMS purchased before the price cut, amounting to a N16 billion loss absorbed by Dangote. PETROAN President, Dr. Billy Gillis-Harry, praised the initiative, describing it as a significant relief for retail outlet owners and a demonstration of the refinery’s commitment to fair pricing.
The price reduction has been attributed to several factors, including the strengthening of the naira and a drop in crude oil prices in the international market. Chief Chinedu Ukadike, Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria (IPMAN), explained that the dollar exchange rate has declined in recent weeks, while crude oil prices have also fallen. These developments have strengthened the deregulation process, with prices now playing a key role in determining consumer behaviour.
However, the abrupt price cut has posed challenges for independent marketers, many of whom had already purchased large volumes of fuel at the previous higher price. Some marketers had up to three million litres in stock, while others had fuel-laden trucks still in transit when the reduction was announced. Ukadike noted that while major marketers with strong financial backing can quickly adjust their pump prices, independent marketers are struggling to absorb the losses due to their weaker financial capacity.
The threatened shutdown of operations by independent marketers over a N100 billion bridging debt has been put on hold following the Federal Government’s intervention. Ukadike expressed optimism that the issue would be resolved within two weeks, following discussions with the Minister of State for Petroleum (Oil). This development has provided some relief to independent marketers, who have been counting their losses in the wake of the price reduction.
PETROAN has welcomed the price reductions, highlighting their potential to lower transportation costs and ease financial burdens on Nigerians. Dr. Gillis-Harry commended NNPC Retail Ltd for its proactive measures and described the price reduction as a huge relief for many citizens struggling to make ends meet. He also applauded Dangote Refinery for its refund policy, which he said would positively impact retail outlet owners and help mitigate losses for those who had stocked PMS at higher rates before the price adjustment.
The NNPC’s decision to slash petrol prices, coupled with Dangote Refinery’s competitive pricing strategy, marks a significant step towards ensuring energy security and fostering a competitive market environment in Nigeria. While the price reduction has been welcomed by consumers and industry stakeholders alike, the challenges faced by independent marketers underscore the need for continued government intervention and support to ensure a balanced and sustainable downstream sector. As market forces continue to drive price adjustments, Nigerians can look forward to more competitive pricing and improved access to petroleum products in the months ahead.
