Importers undercut Africa's richest man as fuel prices in Nigeria get more competitive
Independent fuel importers in Nigeria have significantly lowered prices, intensifying competition in the market.
The reduction in depot rates, spearheaded by companies like Aiteo and Menj, has challenged prices set by Dangote Refinery.
Chinedu Ukadike emphasized the importance of market liberalization and opposed banning petroleum imports.
This time, it is not the refinery that is driving the market, but rather the marketers who are lowering prices.
According to recent investigations by The Punch, numerous filling stations are now selling fuel for less than N860 per litre, which is lower than prices charged by Dangote-linked marketers such as MRS, Heyden, and others in Lagos and Ogun States, which range from N865 to N875.
SGR, a filling station in Ogun State, reportedly reduced its pump price to N847 per litre on Tuesday.
The true game changer, however, is in the ex-depot market.
Importers like Aiteo and Menj have reduced their depot rates to N815 per litre, which is lower than the N820 presently offered by the Dangote refinery.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, stated that the importers continue to evaluate lower prices.
'Depot owners are dropping their petrol prices. Some of them are selling N815, some are selling N817, while Dangote is selling N820. NNPC is still selling at N825; it has not dropped its prices yet,' he stated.
He also touched on the subject of fuel importation, suggesting that President Bola Tinubu should not to adhere to demands to outlaw the import of petroleum, calling this the beauty of market liberalization.
'This is the beauty of the liberalization of the market. That is why we opined that the President should not ban anybody from importing petroleum products,' he stated.
Nobody should be stopped from bringing in petroleum products. That is the beauty of opening up the market. Implementation and local refining will checkmate unfair pricing. As an indigenous country, you must refine to ensure that you have the best price,' he added.
The decision to cut fuel prices came just a few days after Dangote urged the country's current administration to ban the importation of fuel.
Speaking at the Global Commodity Insights Conference in Abuja, presented by the Nigerian Midstream and Downstream Petroleum Regulatory Authority in collaboration with S&P Global Insights, Dangote said unequivocally that petroleum products should be listed on the list of prohibited imports.
'The Nigeria First policy announced by His Excellency, President Bola Tinubu, should apply to the petroleum product sector and all other sectors,' the Nigerian billionaire stated.
Fuel price wars in Nigeria after the Israel-Iran conflict
Earlier this month, the Dangote Petroleum Refinery initiated the price competition by trimming its gantry price of Premium Motor Spirit (PMS) from N880 to N840 per litre, a 4.5% reduction aimed at providing relief to Nigerians grappling with high fuel costs.
Not long after, the refinery again slashed pricing, this time to N820.
These measures were considered noteworthy, especially given the refinery's past price rises, which were partially motivated by geopolitical concerns in the Middle East, notably the war between Israel and Iran.
At the time, Dangote, along with NNPC and other marketers, retaliated by hiking petroleum prices. However, the refinery quickly flipped, lowering pricing to match the reality of the global oil supply chain.
This is hardly the first price war initiated in the sector.
Late last year and earlier this year, the Dangote Refinery and the NNPC engaged in a fierce battle for the larger shares of the fuel market.
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