Fuel marketers in Nigeria are weighing the possibility of shifting away from the Dangote Petroleum Refinery due to the decreasing cost of imported petrol, which has become more affordable than Dangote’s offerings.
As of Friday, the landing cost of Premium Motor Spirit (PMS) was reported to have dropped to N922.65 per litre, a significant decrease from the N955 per litre price set at Dangote’s loading gantry. This reduction, which accounts for shipping, import duties, and exchange rates, is encouraging many dealers to explore importing petrol independently.
A major marketer, who requested anonymity, highlighted the cost advantage of imported petrol, stating: “The lower cost of imported petrol is an attractive incentive for us to import rather than rely solely on Dangote’s refinery.”
Last week, the Dangote Petroleum Refinery increased its price from N899.50 to N955 per litre, attributing the hike to rising crude oil prices, a key input for refined petroleum products. However, the latest reduction in landing costs provides a possible relief from global oil price volatility.
Despite this shift, retail petrol prices in Nigeria have remained high, with major marketers selling petrol at N990 to N1,010 per litre in the Federal Capital Territory (FCT). Data from the Major Oil Marketers Association of Nigeria (MOMAN) shows that the point-of-import petrol cost decreased by 2.2%, from N943.75 per litre to N922.65 per litre. The drop in Brent crude prices has also benefited importers, further driving the shift.
The lower landing cost has created an opportunity for independent marketers and depot owners to profit by sourcing cheaper petrol. The ex-depot price now ranges between N950 and N990 per litre. While this development is viewed positively by stakeholders in the downstream oil and gas sector, exchange rates and freight costs continue to influence price fluctuations.
Surprising Surge in Imports
Recent data from the Nigerian Ports Authority revealed that oil marketers imported 76.84 million litres of petrol within two days. This was facilitated by the arrival of two vessels at Apapa and Tin Can Island ports in Lagos, with another two docking at the Dangote terminal at Lekki Deep Seaport.
The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, expressed surprise at these imports, emphasizing that stakeholders had agreed to refrain from importing while Dangote’s refinery scaled up production.
“I am surprised to hear that anyone has landed imported fuel,” Gillis-Harry told Punch. “The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) led the non-import agreement. The idea was to give the Dangote refinery 180 days to prove its production capacity. Besides, there is now an industry stakeholder forum inaugurated last week to direct industry activities.”
No Binding Import Restriction
Chinedu Ukadike, the National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), clarified that the non-import agreement was not binding but a mutual understanding. According to him, marketers initially refrained from importing because Dangote’s products were cheaper at the time.
“There was no agreement like that, but it was a mutual understanding not to import,” Ukadike explained. “It was because, at the time, Dangote products were cheaper than imported ones. NMDPRA is supposed to issue licenses to anyone who can import at a cheaper rate. We all are looking for cheaper options, and that is what is happening now.”
The ongoing price shifts have further complicated the dynamics in Nigeria’s fuel market, as marketers explore more cost-effective alternatives while navigating regulatory and economic pressures.
