Check Prices Here As Fuel Stations Sell Below Dangote’s Price

Fuel stations have started selling petrol below Dangote’s ₦739/Litre.

NewsRain Nigeria reports that some retail outlets have dropped the prices of Premium Motor Spirit (petrol) below the N739 per litre recommended by the Dangote Petroleum Refinery.

This is coming after Dangote refinery slashed petrol pump prices from about N900 to N739 in December, and many importers and depot owners have lamented mounting losses. To remain competitive, many operators were forced to sell petrol at rates below their costs.

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During a survey over the weekend, some filling stations now sell PMS cheaper than MRS Oil, the main partner endorsed by the Dangote refinery to champion the price reduction to N739 per litre.

As of Sunday, NIPCO sold PMS at N738 per litre, SAO filling stations sold it at N735, while Akiavic offered the product at N737. An AP filling station beside an MRS outlet in Mowe, Ogun State, dropped its price to N736 per litre.

It was gathered that filling stations located in the same areas now closely monitor rivals’ pump prices to avoid being undercut in the highly competitive market. Our correspondent reports that motorists troop to stations offering the lowest prices, leaving outlets selling at higher rates struggling for customers.

According to the Major Energies Marketers Association of Nigeria, the landing cost of petrol averaged N762.38 per litre, while Dangote’s ex-gantry price remained N699. But even with the difference, importers still adjusted prices to compete with the Dangote-backed MRS.

It was reported earlier that both Dangote and importers were counting losses running into billions of naira.

Recall that on December 12, the Dangote refinery surprised depot owners and marketers when it slashed the gantry price of petrol by N129, from N828 to N699 per litre.

A few days later, the President of the Dangote Group, Aliko Dangote, said he had information that some marketers planned to keep pump prices high despite the reduction. Consequently, Dangote vowed to enforce the new pricing regime, with MRS selling petrol at N739 per litre.

“We are going to use whatever resources we have to make sure that we crash the price down. For December and January, we don’t want people to sell petrol for more than N740 nationwide. Those who want to keep the price high to sabotage the government, we will fight as much as we can to make sure that these prices are down. If you have money to come and buy, you can pick up petrol at N699,” Dangote said.

Industry players said filling stations operating within the same locations now closely monitor one another’s pump prices to avoid losing customers in the increasingly competitive market.

Motorists, our correspondent observed, have continued to patronise stations with the lowest prices, leaving outlets selling at higher rates struggling to attract customers.

The Major Energies Marketers Association of Nigeria disclosed that the landing cost of imported petrol currently averages ₦762.38 per litre, while Dangote’s ex-gantry price stands at ₦699 per litre.

Despite this margin, importers and depot owners have adjusted pump prices downward to compete with Dangote-backed MRS outlets, even as both sides reportedly record losses running into billions of naira.

An operator, who spoke on condition of anonymity, told Punch that the price cuts were driven purely by competition.

“This is not a function of whether imports are better or not, but simply a market strategy to get a good share of the market. However, it needs to be stressed that we are not at war with any marketer or depot operator nor any refinery,” he said.

The current situation followed a major price adjustment on December 12, when the Dangote refinery reduced its petrol gantry price by ₦129, from ₦828 to ₦699 per litre.

Shortly after, the President of the Dangote Group, Aliko Dangote, accused some marketers of planning to keep pump prices high despite the reduction and vowed to enforce the new pricing regime nationwide.

“We are going to use whatever resources we have to make sure that we crash the price down. For December and January, we don’t want people to sell petrol for more than ₦740 nationwide,” Dangote had said.

Following the directive, MRS stations in Lagos and Ogun states began selling petrol at ₦739 per litre, leading to queues as motorists boycotted outlets with higher prices.

Reacting to the ongoing competition, the spokesperson for the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, said price competition was inevitable in a deregulated market.

“We are in a situation where competition can be determined by price. Patronage will be determined by pricing. Nobody is regulating you; the market will regulate itself,” Ukadike said.

He warned that marketers who fail to adjust prices risk losing customers and seeing their capital eroded by bank interest charges.

“Once Dangote reduced the gantry price to ₦699, marketers had no choice but to move towards competitive pricing. If not, interest from banks will be eating your capital,” he added.