Petrol landing cost surges to ₦870/litre—exceeding Dangote’s ₦835—squeezing importers and igniting a nationwide price war.
The landing cost of Premium Motor Spirit (PMS) has surged to an average of ₦870 per litre, eclipsing Dangote Petroleum Refinery’s ex-depot price of ₦835 and squeezing the margins of importers and marketers nationwide.
As MEMAN data reveal daily cost spikes—₦872 on April 28 and ₦868 on April 29—petrol importers struggle to break even, prompting some to sell below cost to maintain supply.
Regional disparities persist, with stations in Lagos undercutting those in the South-South due to logistics, while independent marketers like SGR in Ogun have dropped prices to ₦855.
Industry leaders warn that arbitrary price fluctuations dampen sales, even as the Federal Government’s naira-for-crude policy and Dangote’s modest price cuts shape market dynamics.
S&P Global notes that Dangote’s gantry pricing has remained largely static despite global fuel-price declines, incentivising continued imports.
The New Reality: Landing Costs vs Dangote Prices
The Major Energies Marketers Association of Nigeria (MEMAN) reports that the landing cost of imported PMS has climbed above ₦870 per litre, marking a significant rise from ₦859 on April 23 to ₦872 on April 28 and ₦868 on April 29. This uptick places landing costs squarely above Dangote Petroleum Refinery’s announced ex-depot price of ₦835 as of late April.
Importers now face a stark choice: sell at a loss or risk stockouts. According to petroleumprice.ng, Dangote’s partners Matrix (Lagos) and Rainoil offered petrol at ₦840 on a recent Thursday, while independent outlets such as Pinnacle and Mao were forced to price at ₦889—well above import costs.
Impacts on Marketers and Consumers
Arbitrary price fluctuations have throttled business activity, says Billy Gillis-Harry, National President of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN). He laments: “Business has been very slow, with the up and down price of PMS from arbitrary changes that are not effectively managed by the market forces”.
Petroleum importers confirm they sometimes sell below their landing costs to keep pumps open, citing losses incurred when the naira-for-crude policy was briefly suspended in March—an interval that saw PMS prices escalate from ₦860 to ₦950.
Navigating Policy and Market Forces
The Federal Government’s naira-for-crude initiative, which allows Dangote Refinery to pay for domestic crude in naira, has enabled successive petrol price cuts. Since reinstating the policy indefinitely, Dangote has trimmed gantry prices from ₦880 to ₦835, with partner stations in Lagos directed to sell at ₦890.
However, S\&P Global observes that Dangote’s gantry pricing barely budged—only a 1.7 per cent drop from ₦880 to ₦865 between April 1 and 9—despite a 17.9 per cent global slump in refined-product swap rates. This rigidity has encouraged importers to continue shipping fuel into West Africa, betting on higher domestic retail prices to offset import costs.
Regional Price Variations
Location remains a key determinant of end-user prices. Our correspondent notes lower depot prices in Lagos compared to the South-South, where logistics costs force pump prices higher.
In the Ogun axis, SGR filling stations on the Sagamu–Mowe corridor boldly sell PMS at ₦855 per litre—undercutting Dangote’s partners—while MRS offers at ₦890 and Heyden at ₦885.
Expert Perspectives
MEMAN forecasts continued volatility, warning that resistance from entrenched interests may hinder full realisation of the naira-for-crude policy’s benefits. As AllAfrica reports, landing costs once spiked by ₦88 per litre in a single week, highlighting the fragility of current market balances.
Energy analysts argue that sustained local supply from Dangote could stabilise prices long-term, but only if gantry rates more closely mirror global market downturns. Otherwise, importers will persist, perpetuating the price squeeze on local marketers.
Outlook and Conclusion
With MEMAN’s daily bulletins signalling fresh cost surges, petroleum marketers brace for narrower margins. While Dangote’s steady price reductions offer respite, their reluctance to match global price falls fully may prolong import incentives. The Federal Government’s role in enforcing market discipline and ensuring transparent implementation of the naira-for-crude deal will be crucial.
For consumers, the prospect of sub-₦900 petrol in select regions provides temporary relief, but national price stability hinges on deeper alignment between domestic refining costs and global market realities.
- Additional report from Taiwo Adebowale
