Fuel Prices May Hit ₦950/Litre in Lagos, Marketers Warn

Marketers predict a potential surge in fuel prices, estimating it may sell for as high as ₦950 per litre in Lagos, raising concerns about affordability and economic impact.

Independent oil marketers, represented by the Independent Petroleum Marketers Association of Nigeria (IPMAN), have projected a decrease in the retail price of Premium Motor Spirit (PMS), commonly referred to as petrol, to N950 per litre in Lagos.

In the capital city of Abuja, the anticipated price is expected to be N990 per litre, influenced by various location-specific factors, particularly logistics.

Chinedu Ukadike, the National Publicity Officer of IPMAN, conveyed this forecast during a recent interview. He remarked, “When there is a reduction in price, it will have a cascading effect. The pump price will be adjusted to below N1,000, although the exact difference will depend on the location. It may be N950 in Lagos and potentially N990 in Abuja, with logistics being a significant factor. It is important to note that the price of diesel remains unchanged, which is what we use to fuel our tankers.”

This anticipated adjustment follows the decision by Dangote Petroleum Refinery to reduce its ex-depot price to N899.50 per litre, marking the second price cut within a month. This new pricing reflects a seven percent decrease from the previously set price of N970 per litre, which was announced on November 24.

Earlier, Anthony Chiejina, the Group Chief Branding and Communications Officer of Dangote Group, revealed a special holiday discount on petrol prices. He stated, “Effective today, our petrol will be priced at N899.50 per litre at our truck loading gantry or SPM. Additionally, for every litre purchased in cash, consumers will have the option to acquire another litre on credit, supported by a bank guarantee from Access Bank, First Bank, or Zenith Bank.”

The refinery has implemented a tiered pricing structure: N899.50 per litre for two million litres with a 15-day bank guarantee, and N895 per litre for ten million litres under similar conditions. Chiejina highlighted that this initiative is designed to offer financial relief during the festive season while ensuring the availability of high-quality products.

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Impact on Consumers and Market Participants
Abubakar Maigandi, Chairman of IPMAN, characterized the recent price reduction as a “positive development” during an interview with Arise TV. He remarked, “What Dangote has accomplished aligns with our expectations. My marketers are quite pleased with the decrease… We have been advising Nigerians to remain patient; we anticipated a price drop, and it is gradually becoming evident.”

Maigandi confirmed that retail prices would be modified to benefit consumers, noting that lower transportation costs would have a favorable effect on economic activities.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) also commended the price reduction. Dr. Billy Gillis-Harry, the National President of PETROAN, stated, “This price reduction will ease the hardships faced by Nigerians and lower the cost of living and transportation during this festive season.”

NNPCL and Supply Challenges
In the meantime, the Nigerian National Petroleum Company Limited (NNPCL) has faced difficulties in fulfilling its crude oil supply commitments to the Dangote Refinery, delivering only 202,000 barrels per day in December, which is below the agreed amount of 385,000 barrels. Analysts predict that the refinery’s expanding operations will influence West African crude trade flows by 2025.

Although the Dangote Refinery has mainly depended on Nigerian crude, recent tenders indicate intentions to diversify its crude sources, potentially incorporating Angolan heavy and medium sweet grades. Market analysts believe that such changes could further stabilize Nigeria’s downstream sector and improve fuel availability.

As the festive season progresses, stakeholders remain hopeful that these reductions will alleviate the financial strain on Nigerians while fostering a more competitive fuel pricing environment.