- Dangote Refinery’s petrol price is now just N2 lower than imported petrol, driving market competition
- Wider price advantages for diesel and aviation fuel favour local refining over imports
- Exchange rate stability and crude oil volatility impact future petrol prices for Nigerian consumers
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The landing cost of Premium Motor Spirit (PMS), popularly known as petrol, has risen slightly above the price offered by the 700,000-barrel-per-day Dangote Petroleum Refinery, even as private depots across Nigeria slash their prices to remain competitive.
Recent checks show that imported petrol currently lands at about N1,167 per litre, compared with N1,165 per litre offered by Dangote Refinery.
Credit: Novatis
Source: Getty Images
The difference is just N2 per litre, highlighting the increasingly competitive position of locally refined petrol in the Nigerian downstream market.
The narrow price gap means importers face tougher competition as domestic refining capacity expands and local marketers increasingly gain access to products refined in Nigeria.
Diesel and aviation fuel show wider price gaps
The price advantage is more pronounced in other petroleum products.
Automotive Gas Oil (AGO), commonly known as diesel, is reportedly sold by Dangote Refinery at N1,570 per litre, while imported diesel has a landing cost of approximately N1,640.87 per litre. This represents a difference of N70.87 per litre in favour of the local refinery.
Aviation fuel also shows a substantial gap. The landing cost of imported aviation fuel stands at about N1,536.23 per litre, compared with N1,353.75 per litre from Dangote Refinery.
Meanwhile, Dangote Refinery has also reduced the price of liquefied petroleum gas, commonly known as cooking gas, with its product reportedly selling at N925,000 per metric tonne.
Depots cut petrol prices as competition intensifies
The pressure is also spreading across private petroleum depots, with several operators reducing their petrol prices after earlier rates climbed as high as N1,200 per litre.
Industry data show that some depots have now reduced their prices to around N1,180 per litre, bringing them much closer to the Dangote Refinery’s rate.
Among the depots recording lower prices are Soroman at N1,189 per litre, SOBAZ at N1,180, Pinnacle at N1,167, FYNEFIELD at N1,180 and Pivot at N1,180 per litre.
The reductions could provide some relief for fuel marketers and consumers, particularly if the lower depot prices translate into cheaper pump prices at filling stations.
Exchange rate remains a major factor
Marketers said the exchange rate used in calculating import parity prices stood at approximately N1,362.53 to the dollar.
According to industry sources, relative stability in the naira-dollar exchange rate has contributed to the recent moderation in petrol and other petroleum product prices.
Because imported fuel costs are heavily influenced by foreign exchange rates, crude oil prices and international shipping expenses, movements in any of these factors can quickly affect local pump prices.
Crude oil market remains volatile
International crude oil prices have also remained volatile amid renewed geopolitical tensions involving Iran and the United States and concerns surrounding the strategic Strait of Hormuz.
Recent market data showed Brent crude at $88.52 per barrel, West Texas Intermediate (WTI) at $82.40 and Murban crude at $89.42 per barrel.
Analysts expect uncertainty to persist in the global oil market as tensions around the Strait of Hormuz continue to threaten the stability of crude supplies and shipping routes.
Credit: Novatis
Source: Getty Images
For Nigerian motorists and households, however, the immediate focus remains on whether falling depot and landing costs will eventually translate into further reductions at filling stations and lower energy costs nationwide.
The growing price competition between imported fuel, private depots and Dangote Refinery could reshape Nigeria’s downstream petroleum market, particularly as local refining capacity continues to expand.
Dangote Refinery raises petrol price
Legit.ng earlier reported that Nigerians could face another round of petrol price increases after the Dangote Refinery raised its ex-gantry petrol price, triggering fresh upward pressure across the downstream petroleum market.
The 700,000-barrels-per-day Dangote Refinery increased its petrol price by N15.50, from N1,150 to N1,181 per litre.
The latest adjustment comes as international crude oil prices approach $90 per barrel amid growing concerns over global energy supply.
Source: Legit.ng