Dangote Petroleum Refinery’s latest move to reduce petrol prices by N65, from N890 to N825 per litre, has left fuel importers in a panic.
This price cut, effective from February 27, is the second reduction in the new year and the third in just two months.
As a result, importers are feeling the heat, saying they may incur losses due to the reduced prices.
The landing cost of PMS was around N927 a litre in the past week, higher than Dangote’s ex-depot price.
This means importers have been selling their products with little to no margin to compete in the market.
With Dangote’s price reduction, they may be forced to sell below their cost prices, leading to significant losses.
Some importers believe Dangote is intentionally reducing prices to discourage fuel importation.
The National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, agrees that the price reduction will affect importers, as Dangote maximizes the advantages of deregulation.
Despite the concerns, the price slash has been welcomed by many, including the Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN).
Speaking on behalf of IPMAN, he described the price slash as a welcome development, saying the association will continue to patronise the refinery.
“It is a welcome development. We laud Dangote’s achievement of bringing the 650,000 single-train refinery to Nigeria. Independent marketers have justified supporting the removal of subsidies and supporting our local companies. We will continue to patronise Dangote via MRS, and we will do everything possible to support them,” he stated.
Also, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, also commended Dangote for the new development.
“It is a good development. PETROAN applauds that because Nigerians are going to be better for it. Congratulations to Nigerians,” Gillis-Harry said.
He stressed that environmental and economic factors will determine the price, going forward.
