Babatunji Wusu –
- Dangote Refinery and NNPC have recently cut petrol prices to N899 per litre.
- The price reductions are expected to lower the financial burden on Nigerians, especially during the festive season.
- There is hope that further price cuts may follow, driven by competition among oil marketers.
- Industry leaders emphasize the potential benefits of deregulation and competition in the downstream sector.
- PETROAN highlights the positive impact on consumers but urges caution regarding product quality.
Background: On December 19, 2024, Dangote Refinery reduced its petrol price to N899.50 per litre for marketers. Following this move, the Nigerian National Petroleum Company Limited (NNPC) also slashed its ex-depot price from N1,020 to N899 per litre on December 21, 2024. This price adjustment has brought hope to Nigerian motorists, who are optimistic that the reduction will ease the financial strain of rising fuel prices, particularly during the busy holiday season.
Details of the Price Reductions:
- Dangote’s price cut was followed by NNPC’s reduction, aligning the ex-depot price at N899 per litre, a significant decrease.
- However, marketers purchasing from regions like Warri, Oghara, Port Harcourt, and Calabar will pay slightly more, at N970 per litre.
- This price reduction is viewed as a response to the competitive pressure created by the deregulation of the downstream sector in Nigeria.
Industry Response:
- The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) welcomed the price reduction, praising both Dangote Refinery and NNPC for their role in making petrol more affordable for Nigerians.
- PETROAN’s National President, Billy Harry, emphasized that the reduction would benefit consumers by lowering transportation costs, boosting economic activity, and improving living standards.
- He also noted that the price cuts would lead to increased disposable income and lower production costs, stimulating broader economic growth.
Concerns Over Quality:
- Despite the benefits of reduced fuel prices, PETROAN raised concerns about potential compromises in product quality due to aggressive competitive pricing. PETROAN called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority to ensure strict adherence to quality standards.
Outlook:
- Market experts, including Dr. Joseph Obele, the National Public Relations Officer of the Petroleum Products Retail Outlets Owners Association of Nigeria, believe that the trend of price cuts could continue into 2025, driven by the global decline in crude oil prices and Nigeria’s recent currency improvements.
- Obele described the price reductions as part of a “price war,” which he believes could further benefit Nigerian consumers.
The reductions by Dangote Refinery and NNPC demonstrate the benefits of competition in the market, and the hope is that the positive trend will continue, making fuel more affordable and stimulating economic activity. However, industry leaders are also advocating for regulatory oversight to maintain fuel quality despite the price cuts.
