Oil Marketers has expressed concerns over the pricing strategy of Dangote Refinery, stating that the ₦780 per litre price for PMS (petrol) via ship delivery is outrageous. However, the association reassured Nigerians that its members will remain competitive in the market and will not shut down their depots.
Deregulation Has Brought Competition
Speaking in an exclusive interview, a prominent oil Marketer says price reduction as a welcome development, highlighting that deregulation fosters healthy competition in the market. According to him, oil markers thrives on competition and does not view the price adjustment as a threat.
“The price reduction is not a problem. It is part of the competition between oil markers members and Dangote Refinery,” he said.
He emphasised that if Dangote’s price is unfavourable, Markers members have alternatives.
“If Dangote’s price is not okay, we will source from NNPCL. If NNPCL is not okay, we will go out and import,” he explained.
Why Oil Markers Considers Dangote’s ₦780 Ship Price Too High
The main concern raised by an Oil Merchant is the actual cost implication of purchasing from Dangote Refinery. While Dangote offers ₦780 per litre for PMS delivered via ship, marketers incur additional expenses such as shipping and logistics costs amounting to about 65 dirhams per litre.
When these additional costs are factored in, the effective landing cost rises to approximately ₦845 per litre, which is ₦20 higher than what Dangote is currently selling at his coastal depots (₦825 per litre).
“Dangote’s coastal prices are a bit high. If he gives us a competitive price, we will patronise him instead of importing,” the oil marketer noted.
Marketers Ready to Compete, We Won’t Shut Down Our Depots
Despite the pricing concerns, Oil Marketer’s made it clear that its members are not planning to shut down depots. Instead, they will continue to explore multiple sourcing options to keep the market stable and ensure product availability.
The association further explained that importing fuel remains a viable alternative when Dangote’s prices are not competitive. This suggests that Nigeria’s fuel import market is still active, despite Dangote Refinery’s increasing dominance.
The Future of PMS Pricing in Nigeria
With Nigeria’s petroleum sector fully deregulated, pricing competition between Dangote Refinery, NNPCL, and independent marketers is expected to intensify. For Dangote to increase supply into Nigerian market, he will need to offer competitive coastal and depot prices that align with the realities of distribution costs.
For now, Oil Marketer’s are standing firm, ensuring that Nigerian consumers continue to have multiple supply options in a liberalised market.
