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Petrol Landing Cost Drops To N797/litre As Oil Marketers Slash Purchases Amid Price War
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PETROL LANDING COST DROPS TO N797/LITRE AS OIL MARKETERS SLASH PURCHASES AMID PRICE WAR

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The landing cost of imported Premium Motor Spirit (PMS), commonly known as petrol, fell to N797 per litre on Monday, marking a significant drop amid ongoing price wars in Nigeria's downstream oil sector.

According to a report by The PUNCH, the latest reduction follows a strategic price cut by Dangote Refinery, which recently lowered its loading cost from N825 per litre to N815 per litre. This move forced private fuel depots to adjust their prices downward to stay competitive.

Industry experts note that the ongoing price decline has led to massive losses for oil marketers and importers, who reportedly lose around N2.5 billion daily and N75 billion monthly. In response, oil marketers under the Petroleum Retail Outlets Owners Association of Nigeria (PETROAN) have urged regulators to implement a policy mandating price adjustments only every six months. However, it's uncertain whether this request will be approved.

Speaking with Sunday PUNCH, the National Vice President of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Hammed Fashola, highlighted the challenges faced by marketers. While the price war has temporarily benefited Nigerians, the unpredictability of the market has forced oil marketers to reduce their purchases to minimize losses.

Data from the Competency Centre’s daily energy report revealed that petrol-importing marketers now pay N797.66 per litre in landing costs, factoring in shipping, import duties, and exchange rates. This marks a notable decrease from last week's N817.82 per litre.

The report further noted a drop in on-the-spot sales at the NPSC-NOJ terminal to N797.73 per litre, down from N817.90 per litre last week. Additionally, the 30-day average cost decreased to N851.76 per litre from N854.15 per litre.

Despite the declining landing costs, concerns remain about potential disruptions in pricing strategies among the Nigerian National Petroleum Company Limited (NNPCL), Dangote Refinery, and private depot owners.

Global factors like geopolitical tensions, Middle East conflicts, China's market dynamics, and seasonal variations continue to impact international petroleum product pricing. Brent crude prices, benchmarked at $70.58 per barrel, and the exchange rate of N1,517.93 per dollar also influence the landing costs.

As the fuel market faces volatility, the future of petrol pricing in Nigeria remains uncertain, with industry stakeholders awaiting potential regulatory interventions to stabilize the sector.

 

"This represents a significant development in our ongoing coverage of current events."
— Editorial Board

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