MAJOR Oil Marketers have confirmed that market forces and a healthier competitive environment have a huge influence in determining the price of Premium Motor Spirit (PMS) further down as Dangote Petroleum Refinery has again slashed the price of fuel.
The ICIR reports that Dangote Petrochemical Refinery on Friday, March 14 reduced its ex-depot premium motor spirit price to N815 per litre.
The latest drop comes after fuel landing cost dropped to N784.83 per litre, below Dangote Refinery’s N825 ex-depot prices.
This is not the first time the company slashed price, as The ICIR reported in February that the firm reduced its ex-depot (gantry) price of petrol to N825 per litre.
The ex-depot price is at which the marketers buy the product at the refinery depots before putting their mark-up price for sales at filling station retail outlets.
Dangote Petrochemical did not officially announce this development, however, the spokesperson of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike confirmed the development to The ICIR.
“It is true. There is speculation that the price of importers’ products is now lower. That’s the reason for the price war.
“It is the beauty of deregulation. Dangote has millions of litres and would not want any external force to take its market share. So, it would have forced price reduction,” Ukadike added.
Africa’s richest man Aliko Dangote has established himself as the dominant player in Nigeria’s petroleum downstream sector while influencing the price fixing across the nation.
This has led to some eyebrows being raised about his market dominant influence as witnessed a few weeks back with his price war battle with the Nigeria National Petroleum Company Limited (NNPCL).
Informed energy analysts have urged the federal government to ensure healthier competition and avoidance of possible ‘price gouging’ to enable healthier competition for all sector players.
“The overriding factor influencing gasoline price crop is a direct consequence of competition enabled by deregulation or liberalisation of the downstream sector. The only way to ensure that prices remain at the lowest level is to ensure very robust competition in the industry. Prices are being forced down because imports are still being allowed to determine actual landing costs of gasoline,” former Chairman of the Major Oil Marketers Association of Nigeria (MOMAN) Adetunji Oyebanji told The ICIR.
The ICIR reported recent concerns of Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) alert of a possible monopoly in the sector which may not give opportunities for marketers at the lower rung of the ladder.
PETROAN, specifically met with the Minister of State for Petroleum Resources, Heineken Lokpobiri to discuss issues affecting the country’s petroleum downstream sector, including price stability.
In his remarks, PETROAN’s president, Billy Gillis-Harry, called for a permanent percentage allocation of petroleum products to its members to ensure efficient distribution to Nigerians.
Gillis-Harry urged the minister to endorse the PETROAN Quantity Assurance Quality Control Price Intelligence and Monitoring System to support existing technology in tracking and safeguarding loaded petroleum products from the depot to their final destination.
He emphasised the need for the government to support multiple sources of petroleum product supply to encourage healthy competition.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.