I n a move aimed at providing economic relief to Nigerians, Dangote Petroleum Refinery has announced a reduction in the ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol, from N950 to N890 per litre, effective immediately. This adjustment is attributed to favorable shifts in the global energy market and declining international crude oil prices.
Anthony Chiejina, the Group’s Chief Branding and Communications Officer, stated that the price cut reflects Dangote's commitment to aligning with global market dynamics, ensuring that consumers benefit from international crude price changes. The refinery urged petroleum marketers nationwide to pass on these benefits to the public.
However, petroleum marketers have expressed mixed reactions to the sudden price reduction. Some have welcomed the move as beneficial for consumers and the broader economy, while others are grappling with the financial implications. Marketers who purchased fuel at the previous rate just before the announcement now face potential losses, as they must sell at reduced prices to stay competitive.
Hammed Fashola, Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), acknowledged the dual impact of the price cut. "While it promotes competition and benefits consumers, marketers who bought products at higher prices will incur losses. This is the reality of a deregulated market," he noted. Fashola emphasized the need for marketers to stay informed about market trends to mitigate financial risks.
The competitive environment has also pressured other fuel suppliers, including the Nigerian National Petroleum Company Limited (NNPC), to consider price adjustments. Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), expressed optimism that the NNPC and other importers would follow suit to remain competitive.
Gillis-Harry highlighted the broader economic benefits of the price reduction, including lower transportation costs, reduced living expenses, and potential positive effects on Nigeria's inflation rate. "This reduction will increase disposable income for households, stimulate economic activity, and support growth and development," he said.
Chinedu Ukadike, IPMAN’s National Publicity Secretary, acknowledged that while price reductions can lead to substantial financial losses for traders, they are an inevitable aspect of a competitive, deregulated market. He recalled that similar price cuts in diesel following Dangote’s market entry in early 2024 forced marketers to sell below cost, resulting in significant debts.
As Nigeria navigates these shifts in the petroleum sector, the focus remains on balancing the benefits of competitive pricing with the financial stability of marketers.
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