Nigerian motorists could soon begin paying less for petrol as the latest reduction in depot prices creates fresh room for competition across the downstream petroleum market.
Dangote Petroleum Refinery and several major petroleum marketers have cut their Premium Motor Spirit (PMS) prices at depots following a decline in international crude oil prices. The reductions were recorded across major markets including Lagos, Port Harcourt, Calabar and Warri.
In Lagos, Dangote Refinery reduced its petrol price from ₦1,350 to ₦1,325 per litre, representing a ₦25 reduction.
Several competing marketers also lowered their depot rates. Ascon, Integrated and Sahara reduced their prices by ₦24 per litre to about ₦1,327, while Pinnacle dropped its price to ₦1,326 per litre. MRS also reduced its rate by ₦20 to ₦1,332 per litre.
The narrowing gap between Dangote and other suppliers means marketers are increasingly competing for buyers on price.
The reductions come against the backdrop of weaker international crude prices. Brent crude has fallen below the $100-per-barrel level, while other international benchmarks have also recorded declines. Since crude oil prices influence the cost of refined petroleum products, the movement has begun to filter into Nigeria's downstream market.
However, motorists may not see an immediate reduction at every filling station.
Industry reports indicate that many stations still have petrol purchased at earlier, higher depot prices. Operators may therefore wait until those stocks are exhausted before fully adjusting their pump prices.
Current pump prices in locations covered by recent market reports remain around ₦1,370 to ₦1,450 per litre, depending on the location, supplier, transportation costs and individual station margins.
The latest development nevertheless creates the possibility of cheaper petrol as stations begin receiving products purchased at the new lower depot rates.
The price movement also highlights the increasingly competitive nature of Nigeria's deregulated downstream petroleum market. With locally refined petrol from Dangote competing alongside products supplied by other marketers, changes in crude prices, exchange rates, transportation costs and market demand can quickly influence wholesale and retail prices.
For motorists, the immediate expectation is that filling stations will gradually review their pump prices as cheaper supplies enter their tanks.
If international crude prices remain subdued and other costs do not rise sharply, the latest depot reductions could provide some relief to consumers already dealing with elevated transport and living costs.